Pepkor Defies Economic Gloom with Aggressive Store Expansion Across South Africa

Despite tough economic conditions and mounting pressure on household budgets, Pepkor is pressing forward with bold retail expansion plans. The group, one of South Africa’s largest clothing and lifestyle retailers, expects to open between 250 and 300 new stores in its 2025 financial year—an aggressive move that sets it apart from more cautious competitors.

For the six months ending 31 March 2025, Pepkor already launched 168 new stores, increasing its total footprint to 5,978 outlets. This includes 32 locations under the newly launched Ayana brand, which targets younger consumers with fast fashion.

PEP, the group’s largest chain, saw significant momentum, adding 43 stores and achieving over 10% like-for-like sales growth. Market share gains were reported across all product categories, including clothing for babies and children. Sister brand Ackermans also expanded with 19 new stores, showing strong recovery and growth of nearly 10% in same-store sales.

In the specialty and lifestyle segments, brands like Tekkie Town, Shoe City, Refinery Junior, and Ayana grew to a combined 972 stores. The lifestyle division posted 6.3% like-for-like sales growth, buoyed by increased consumer spending and an expanded homeware range.

Retail Growth in a Tough Economy

What makes Pepkor’s growth particularly notable is that it’s happening against the backdrop of a subdued South African economy. Structural challenges such as high unemployment, weak GDP growth, and constrained consumer finances continue to weigh on the retail sector.

However, Pepkor is leveraging some positive tailwinds—falling inflation, easing load shedding, and the introduction of the two-pot retirement system, which gives consumers greater liquidity.

While some major players like Pick n Pay are shutting stores and downsizing to protect profitability, Pepkor is taking the opposite route—investing in footprint growth and grabbing market share.

Financial Performance: Stronger Earnings

Pepkor’s strategy appears to be paying off. For the six-month period, the group reported:

• Revenue up 12.8% to R48.8 billion

• Profit up 23.4% to R3.05 billion

• Headline earnings per share up 8.5% to 84.3 cents

The group has also solidified its dominance in South Africa’s cellular market, now selling 8 out of every 10 prepaid handsets in the country.

While Pepkor acknowledges the challenges of the local economy and global trade instability, it views the uncertain global tariff landscape as an opportunity to tap into surplus global supply.

The company’s focus remains clear: drive customer value, integrate new brands like Ayana successfully, and control costs tightly. If its current trajectory holds, Pepkor could further entrench its leadership in South African retail—at a time when many others are playing defense.

{Source: BusinessTech}

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