Pick n Pay closes stores in push to turn struggling supermarkets profitable

Pick n Pay’s tough call: shutting down stores to save the business

Pick n Pay is taking drastic action to rescue its struggling core supermarket business, closing underperforming stores and converting others as part of a push to return to profitability. It’s a bold move for one of South Africa’s most recognisable retailers — and it signals how tough trading conditions have become for local supermarkets.

The group’s latest trading update, covering the 17 weeks to 29 June 2025, shows a mixed picture. While turnover grew 4.3% overall, the real gains came from Boxer, Pick n Pay’s lower-cost chain, which continues to outperform the rest of the business. The flagship supermarkets, meanwhile, are still fighting their way back after reporting a R549 million trading loss for the previous financial year.

A retail giant under pressure

South Africa’s retail landscape has been under strain for years, squeezed by slow economic growth, rising household costs and an ultra-competitive grocery market. Consumers have been trading down, chasing bargains, and shopping at discount retailers — a trend that has favoured Boxer but left Pick n Pay’s traditional supermarkets lagging.

The group has already felt the financial pain. In the last financial year, it declared a loss of over R700 million, a sobering reminder that even retail heavyweights can stumble.

To fight back, Pick n Pay launched what it calls its “Store Estate Reset Plan” — essentially closing or repurposing stores that aren’t pulling their weight. Management says these closures are not a sign of retreat, but a strategic step towards breaking even in the medium term.

Early signs of recovery

There are hints that the plan might be working. Like-for-like sales at company-owned supermarkets — which account for most of Pick n Pay’s sales — improved to 4% growth in the latest period, up from 3.1% earlier in the year. Franchise stores have been slower to recover, but the company says the gap between them and company-owned outlets is narrowing.

Boxer remains the star performer, with turnover up 12.1% and like-for-like sales up 3.9%. Clothing has also been a bright spot, growing 17.3% in standalone stores thanks to improved supply chain management and better seasonal timing.

Online shopping is another growth engine. Pick n Pay’s digital sales surged 33%, boosted by the ASAP! delivery service and its partnership with the Mr D app — a sign that convenience-driven shopping is becoming a bigger part of the South African grocery experience.

What shoppers are saying

On social media, reactions to the closures have been mixed. Some shoppers worry that fewer stores could mean less convenience, especially in smaller towns. Others see it as a necessary step to make the brand competitive again, particularly against rivals like Checkers and Woolworths, which have been expanding aggressively in both brick-and-mortar and online channels.

Retail analysts note that while the strategy might cause short-term disruption, a leaner, more profitable Pick n Pay could ultimately benefit customers with better pricing, fresher products and improved store experiences.

The road ahead

Pick n Pay’s turnaround won’t happen overnight. The retail giant still faces a cautious consumer, low food price inflation, and a fiercely competitive grocery sector. But if it can leverage the Boxer momentum, grow its online presence and sharpen its supermarket offering, it might just pull off a rare recovery story in South African retail.

For now, all eyes will be on how many more stores close — and whether this bold reset can turn losses into lasting gains.

Source:Business Tech 

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