Pick n Pay Out of the blue, into the black
As always, we at Trade Intelligence had a sharp-eyed observer at the Pick n Pay results presentation last week, and more so than usual, the devil was in the details and nuances – accompanied perhaps by a couple of angels, too. First the bad news: profit down 15% year-on-year off an increase in sales of 8.1% to R55-odd billion, attributable say Pick n Pay to their expenditure on tightening the supply chain, establishing the specialist category buying function and getting the Smart Shopper loyalty programme up and running. Smart Shopper, incidentally, is already paying massive dividends in terms of both shopper data and targeted promotions, while the numbers above are less worrying than they look, with a pleasing recovery becoming evident in the second half. And while it has been said more than once that deputy CEO Richard van Rensburg is not in line for the main job, the analysts, a notoriously difficult crowd to please, seem to think his pragmatism is just what the doctor ordered during this tricky ambit for the Group. A couple of the focus areas for growth will be Africa, with 94 stores already on the ground and more planned for the DRC and Malawi, and getting the hypers back up to speed, particularly in the neglected area of GM, which will be stacked high and sold inexpensively.
Comment: Being punters, we might pick up a few extra Pikwik shares in happy anticipation of the recovery of which the Big Blue now seems confident.