By Dipo Olowookere
Another South African supermarket, Pick n Pay, is planning to leave the Nigerian market about five years after it made an entry into the space.
Less than half a decade ago, Pick n Pay, which currently operates two stores in Nigeria, explored the country’s market through a partnership with AG Leventis.
However, the company is seeking a way out by offloading its 51 per cent stake in the venture as part of the Pick n Pay Group’s turnaround strategy aimed to achieve “improvement in the performance” of its supermarkets and return the organisation “to profitability within a three-year timeframe.”
The chief executive of the firm, Mr Sean Summers, in a statement to announce the interim results of the company on Monday, said the strategy put in place by the management was “gaining traction with encouraging progress made across a number of key strategic and operational initiatives.”
A part of this is the Pick n Pay store reset process designed to address its loss-making stores, which disproportionately affected performance in the first half of this year, resulting in the closure of 14 underperforming outlets.
Recall that in 2021, 16 years after it opened its first outlet in Nigeria, Shoprite sold its Nigerian operations to a company owned by a group of local investors led by property firm, Ketron.
“Our focus this year has been strengthening our balance sheet, as well as implementing the turnaround plan. Once our capital is in place, we can also start investing in refurbishing Pick n Pay stores and opening new ones.
“Exactly a year ago, when I re-joined Picked Pick n Pay, I forecast that this would be a multi-year journey and that it would get worse before getting better. Our earnings for the first half reflect this, and I am confident that the worst is behind us now.
“I’d like to pay tribute to the entire Pick n Pay team, who has done a magnificent job with huge energy and focus against all odds.
“On Wednesday, we will also announce a strategic partnership that will be a game changer for our business and customers alike, showing further confidence and traction in our journey to restoring Pick n Pay to its rightful place,” Mr Summers said in the statement obtained by Business Post from the company’s website.
In the first six months of FY25 ended on August 25, 2024, Pick n Pay increased its sales growth by 3.1 per cent compared with the negative 0.5 per cent achieved in the second half of FY24.
In the period under review, the company improved its turnover by 3.7 per cent to R56.1 billion, with like-for-like sales growth of 2.9 per cent, with performance varying across divisions.