In 2013, you may recall, Pick n Pay was in a heck of a shape: costs were out of control, profit was falling, and wild-haired executives were roaming the corridors, clutching at each other’s sleeves and asking: “Is Longmeadow working?” Two years down the line, different picture. According to cool-headed pommie CEO Richard Brasher, stage one of the recovery is well over, with four subsequent reporting periods of rising profits safely tucked away, for a total of 74% growth, and stage 2 is steaming ahead nicely, with a more efficient operating model in place, trading expenses down and employee costs tracking well below inflation. Significantly, gross profit margin is up from 17.5% to 17.8%, while trading margin is up 1.6% to 1.9% – below Shoprite levels, say, but clawing its way back. Like-for-like turnover is up 3.6%, with growth in new space at 5.2%. Customers grew 2.4% and the average basket size grew 4%. And Phase 3 – which will see an investment of R5billion in store openings and refurbs – is more than just a gleam in the Ackermens’ eyes.
Comment: Pick n Pay was never going to drop off the map. But in our tightly contested retail environment, even a small decline can read as catastrophic. Encouraging stuff from The Big Blue.