Pick n Pay H1 profit jumps 19% as price cuts lure buyers

The country’s second-biggest grocery store chain reported profit before tax of R670.2 million for the six months ended August, compared with R562.8 million same period last year on a normalised basis.

A PicknPay store. Picture: @PicknPay/Twitter

JOHANNESBURG - South African supermarket chain Pick n Pay stores on Tuesday said half-year profit before tax jumped 19.1% as price cuts attracted more shoppers to its stores.

The country’s second-biggest grocery store chain reported profit before tax of R670.2 million for the six months ended August, compared with R562.8 million same period last year on a normalised basis.

South African shoppers are feeling the impact of low growth in disposable income, little to no job creation and tight credit conditions.

To keep attracting struggling consumers, Pick n Pay reduced prices across 2,500 everyday grocery lines.

“We have invested heavily in our customers, just when they need it most,” Chief Executive Richard Brasher said in a statement.

“We’ve reduced prices of key grocery lines, delivered a more compelling fresh meat and produce offer, and given our customers simpler and more personalised promotions.”

Like-for-like sales climbed 3.8%, more than double the previous half-year’s growth. Total sales rose to R41.2 billion, up 6.4%.

A voluntary redundancy programme to cut costs and create a leaner group also helped its performance.

Normalised headline earnings per share climbed 17% to 100.18 cents, the retailer said.

It declared an interim dividend of 39.10 cents per share, up 17.1%.

($1 = 14.3500 rand)