Retail group Pick n Pay has seen its earnings improve for the 26 weeks ended August 30 2026, with its headline loss narrowing by 31.9% to R299 million as management’s turnaround initiatives began delivering results.
The group said trading profit rose 58.1% to R490 million from R310 million a year earlier, while turnover increased 2.4% to R60.5 billion.
The retailer’s loss before tax and capital items improved by 56.2% to R139 million from R317 million in the comparable period. Group net cash strengthened to R10 billion, including R7.7 billion within the core Pick n Pay business.
Turnaround momentum builds
Management attributed the improved performance to progress on its turnaround strategy, including an agreement with labour partners on restructuring the store labour model and the withdrawal of the Section 189A consultation process.
The group’s trading profit improvement of R180 million was driven by a R75 million increase in Boxer’s trading profit and a R105 million reduction in the Pick n Pay segment’s trading loss.
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Gross profit margin expanded to 18.8% from 18.1%, supported by improved margins at both businesses. Other income grew by 4.8%, while trading expenses increased 4.5%, largely due to the continued rollout of Boxer stores.
The core Pick n Pay segment remained loss-making but showed signs of recovery. Trading losses narrowed by 16.9% to R516 million from R621 million in the previous corresponding period.
Turnover was largely flat at R36.4 billion, while the gross profit margin improved to 17.5% from 16.8%. Trading expense growth was contained at 1.7%, significantly lower than levels reported in previous periods.
Core business still under pressure
The retailer’s South African operations continued to face challenging consumer conditions, particularly following fuel price increases in May 2026. South African turnover declined 0.5%, although company-owned supermarkets achieved like-for-like sales growth of 2.4%.
Franchise supermarket like-for-like growth improved to 1%. The company said positive volume growth was achieved in company-owned supermarkets as selling price inflation remained below broader food inflation.
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Online operations delivered one of the standout performances for the period. Pick n Pay’s online turnover grew 35.4%, supported by the launch of its clothing offering on the asap! platform and the introduction of “Penny”, described as SA’s first fully integrated AI-powered grocery shopping assistant.
The company said the AI tool had improved customer engagement, order conversion and average order values.
Online and AI initiatives boost growth
Meanwhile, majority-owned subsidiary Boxer continued to outperform the broader group. Boxer increased turnover by 6.3% to R24.1 billion and grew trading profit by 8.1% to R1 billion.
During the reporting period, Boxer opened its 600th store and increased profit before tax and capital items by 10.6%. The division remains a key earnings contributor to the group.
The group’s liquidity position strengthened significantly following the sale of a further 12.5% stake in Boxer Retail Limited during May 2026.
The transaction generated gross proceeds of R4.7 billion and reduced Pick n Pay’s shareholding in Boxer from 65.6% to 53.1%, while retaining control of the business. Net cash increased by R6.9 billion during the half-year period as a result.
Balance sheet strengthens
Management said substantial work remains to restore sustainable profitability at the core Pick n Pay business. The segment reported a trading profit after a lease interest loss of R1.1 billion, underscoring the scale of the turnaround challenge.
However, executives said improvements in customer experience, recovering gross margins and tighter expense control were beginning to show through in the results. The company is targeting break-even trading profit after lease interest by the financial year 2029.
The board again declined to declare an interim dividend, citing the group’s headline loss and ongoing turnaround efforts.
READ MORE: Pick n Pay asap! launches AI shopping companion, Penny
Looking ahead, management warned that elevated oil prices, food inflation and pressure on consumer spending continue to cloud the trading outlook.
The retailer said South African supermarket like-for-like sales growth in the four weeks after the reporting period was slightly ahead of levels achieved during the first half, providing some encouragement for the remainder of the financial year.
- Pick n Pay's headline loss narrowed by 31.9% to R299 million for the 26 weeks ended August 30, 2026, with trading profit increasing 58.1% to R490 million.
- Turnover rose 2.4% to R60.5 billion, while loss before tax and capital items improved by 56.2% to R139 million from R317 million the previous year.
- Online turnover grew 35.4%, boosted by the launch of clothing on the asap! platform and the AI-powered shopping assistant "Penny."
- Majority-owned subsidiary Boxer increased turnover by 6.3% to R24.1 billion and trading profit by 8.1% to R1 billion, opening its 600th store.
- The group’s net cash strengthened to R10 billion, aided by a R4.7 billion stake sale in Boxer, reducing Pick n Pay's stake from 65.6% to 53.1%.
