Pick n Pay Closes Stores But Sees Recovery as Online and Clothing Sales Surge

Pick n Pay is taking bold steps to reshape its business by closing underperforming stores across South Africa. While the news might raise concerns among customers, the retailer’s latest financial results show signs of a strategic recovery — with promising growth in digital and clothing divisions.

The company recently reported its results for the year ending 2 March 2025, revealing that it has managed to reduce headline losses by over 60%. A big part of this turnaround is due to store consolidation — including the closure or conversion of 40 loss-making supermarkets.

Out of those, 25 company-owned stores were shut down entirely, seven were handed over to franchise partners, and eight were turned into Boxer outlets. Altogether, Pick n Pay’s supermarket footprint shrank by 45 stores, bringing the total to 570 stores nationwide.

The transformation doesn’t stop there. Boxer, Pick n Pay’s value-focused brand, has been gaining traction. The group says stores that were converted to Boxer outlets have seen improved business — a strong indication that this strategy is working.

Turning the Corner Financially

The most encouraging sign for Pick n Pay is its trimmed trading loss. The core supermarket segment reported a R549 million trading loss for the financial year — a significant improvement from the R1.5 billion loss in the previous year. The most dramatic shift happened in the second half of the year, where the segment moved from a R864 million loss to a R170 million profit.

Digital and Clothing Divisions Fuel Growth

While the traditional grocery stores are still stabilizing, Pick n Pay’s clothing and digital businesses are powering ahead. The clothing division opened 30 new stores during the year, pushing the total to 415 outlets. Turnover in standalone clothing stores rose 11.6%, with like-for-like sales improving by 3.8% in the second half — a solid finish despite early challenges from port delays and weather disruptions.

Meanwhile, the group’s online presence has taken a leap forward. Its mobile delivery platform, Asap, has seen explosive growth. Online retail turnover jumped 48.7% year-on-year, and the segment has now become profitable — a first for Pick n Pay.

Franchisees are also embracing the app, with triple-digit growth in online orders from their stores. A newly re-platformed version of the Asap app launched in April 2025, bringing with it features like AI functionality, Smart Shopper integration, and more. The upgraded app is currently in Beta and will be fully rolled out by September, with the revamped Pick n Pay website and nationwide Asap service going live from 1 June 2025.

Despite closing dozens of stores, Pick n Pay appears to be stabilizing its business with a sharper focus on profitability and customer experience. With digital transformation gaining momentum and strong performance in clothing, the retailer is navigating its way out of turbulent waters — and setting the stage for a more resilient future.

{Source: BusinessTech}

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