Ackerman family-backed Pick n Pay narrows loss to $24 million, raises $435 million to fund turnaround

South Africa’s second-largest grocer, Pick n Pay Stores Limited, backed by the Ackerman family, narrowed its full-year headline loss to about $24 million, as strong momentum from its discount arm helped offset continued weakness in its core supermarket business, while the group raised $435 million to accelerate its turnaround.

The improvement comes as the retailer leans increasingly on its high-growth subsidiary, Boxer Retail Limited, while restructuring legacy operations weighed down by rising costs and weak consumer demand.

Boxer drives earnings recovery

Boxer remained the standout performer, with turnover rising 12.3% and trading profit climbing by R330 million ($20.2 million) to R2.6 billion ($159.15 million), reinforcing its role as the group’s primary earnings engine. The unit’s strong growth underscores a broader structural shift toward value-focused retail formats, as consumers grapple with constrained spending in South Africa’s challenging economic environment.

By contrast, Pick n Pay’s core supermarket division continued to struggle, with trading losses widening by R404 million ($24.72 million) to R1 billion ($61.19 million), reflecting ongoing restructuring, including store closures and estate rationalization. Like-for-like sales in company-owned supermarkets rose modestly by 3.9%, while gross margin improved slightly by 0.4 percentage points, supported by gains in fresh food, logistics, and store execution.

Loss narrows as operational gains emerge

For the 52 weeks ended March 1, 2026, headline loss declined 5.4% to R386 million ($23.6 million), from R408 million ($24.95 million) a year earlier. Group turnover increased 1% to R120.3 billion ($7.35 billion), while on a comparable 52-week basis, turnover rose 3.4%, driven largely by Boxer’s double-digit expansion.

Profit before tax and capital items swung to a R360 million ($22 million) profit, from a R237 million ($14.48 million) loss in the prior year, reflecting improved financing costs and early benefits from operational reforms. Chief Executive Officer Sean Summers said the turnaround remains in progress, with foundational changes implemented but full benefits expected over the medium term.

Capital raise strengthens balance sheet

On May 18, 2026, Pick n Pay raised R4.7 billion ($287.11 million) through the sale of 57.3 million Boxer shares via an accelerated bookbuild, reducing its stake from 65.6% to 53.1% while retaining majority control.

The proceeds, combined with R2.4 billion ($146.65 million) in existing cash within the Pick n Pay segment, bring total available funding to R7.1 billion ($435 million), which will be deployed to support the retailer’s turnaround plan and future growth initiatives. Management described Boxer as a “vital part” of the group and reaffirmed its commitment to maintaining a controlling stake in the discount chain.

Labour overhaul takes center stage

Labour costs remain a major constraint, accounting for 41.4% of trading expenses in the Pick n Pay segment, well above industry benchmarks.

The retailer which employs approximately 90,000 people across its Pick n Pay and Boxer operations, has initiated a consultation process under South Africa’s labour laws, engaging employees and unions to restructure its workforce, improve efficiency, and better align costs with competitors. Management said restoring profitability will depend heavily on the success of these labour and operational reforms.

Break-even target pushed out

Pick n Pay, established in 1967, is a leading player in Africa’s retail sector, with over 2,000 stores across eight African countries. It is South Africa’s second-largest grocer, following Shoprite.

Pick n Pay has extended its break-even timeline for the core supermarket division to FY29, from a previous FY28 target, citing the phased implementation of its turnaround strategy. 

The results highlight ongoing structural challenges in South Africa’s retail sector, including weak wage growth, elevated fuel costs, and persistent inflation, all of which continue to weigh on consumer spending.