After a punishing period marked by deep financial losses and strategic missteps, South African retail giant Pick n Pay is showing the first green shoots of a potential recovery, with its latest trading update revealing improved sales momentum and a narrowing expected loss for the first half of the 2026 financial year.
The group’s update for the 26 weeks ending 31 August 2025 indicates that the drastic remedial actions implemented over the past year are beginning to stabilize the core business. This follows a crisis that saw the failure of its ambitious “Ekuseni” strategy, plunging the retailer into technical insolvency and necessitating a complete strategic overhaul.
A Multi-Pronged Rescue Plan Yields Early Results
The turnaround, orchestrated under the returning leadership of veteran CEO Sean Summers, has been aggressive. It was built on three key pillars: a crucial R4 billion rights issue to recapitalize the balance sheet, the successful separate listing of its top-performing Boxer division to unlock value, and a painful but necessary restructuring of the core Pick n Pay store network involving closures and conversions.
The early results of this comprehensive effort are now visible in the top-line numbers. Group turnover rose 4.9%, with like-for-like sales—a key retail metric that excludes the impact of new store openings—growing 4.7%. Critically, the core Pick n Pay South Africa business saw like-for-like sales grow by 4.3%, with the group noting “improved momentum” across all its supermarket formats in the final two months of the period.
Boxer and Online Emerge as Powerhouses
As has been the case in recent years, the standout performer was the value-focused Boxer chain. Its turnover surged 13.9%, with a robust 5.3% like-for-like sales growth, cementing its role as the group’s engine room. Similarly, the clothing division and online sales channels demonstrated strong growth, with online sales skyrocketing 34.4%, driven by the continued success of the asap! delivery service and its partnership with the Mr D app.
In a positive sign for cash-strapped consumers, the group reported its internal selling price inflation at just 2.1%, significantly below the official CPI Food rate of 4.6%, suggesting it is actively working to maintain affordability.
The Road to Profitability: Progress, But Not Yet Mission Accomplished
Despite these encouraging signs, the journey back to profitability is not yet complete. The group confirmed it still expects to report a headline loss for the period. However, in a clear signal that the worst may be over, this loss is expected to be significantly reduced.
This improvement is attributed to a better trading result from the Pick n Pay segment, Boxer’s strong performance, and a “large positive swing in net funding interest” following the rights offer. These gains were partially offset by the financial impact of the Boxer IPO, which introduced a 34.4% non-controlling interest, and an increase in the number of shares in issue from the capital raise.
The update paints a picture of a legacy retailer that has successfully staunched the bleeding and is now slowly regaining its footing. While the patient is not yet fully healed, the vital signs are improving, offering a glimmer of hope to shareholders and stakeholders that one of South Africa’s most iconic retail brands may yet have a future after a near-death experience.
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