Boone takes the reins from Brasher at Pick n Pay

GROCERY retailer Pick n Pay bid farewell to its retiring chief executive, Richard Brasher, and handed over the leadership baton to Pieter Boone as it reported a 21.4 percent decline in annual earnings yesterday, weighed down by a ban on the sale of alcohol and other products and by one-off compensation costs.

Headline earnings per share (Heps) for the 52 weeks to February 28 fell to 229.31 cents from 291.90c.

Comparable Heps, which excludes hyperinflation accounting, fell by 16.8 percent.

Boone, the former chief operating officer of Metro, now leads the retail giant, with a market capitalisation of R26.99 billion, as it traverses the new operational challenges brought upon it by Covid-19 disruption.

Group turnover growth of 4.3 percent was significantly impacted by bans on the sale of alcohol, cigarettes and other tobacco products, which resulted in an estimated R4bn in lost sales.

Sales in core food and groceries in South Africa grew 10 percent, while liquor and tobacco sales fell 31 percent. Clothing sales increased 1.3 percent. Online sales more than doubled over the year, with a 150 percent increase in active online customers, said the retailer, which also operates in Zimbabwe and Zambia, as people avoided crowded malls and shops.

It said its mature grocery platform was able to respond quickly and effectively to meet the surge in demand during the Covid-19 crisis.

In addition to expanding its scheduled delivery service, Pick n Pay extended its Click n Collect offer, and repositioned its one-hour liquor delivery partnership with Bottles into an on-demand essential grocery service.

The group’s franchise partners also moved quickly to serve their customers through safe and convenient home deliveries.

Its loyalty programme, Smart Shopper, which provided its members with R3.5bn in savings this year, now had 8.5 million active members, with loyalty participation growing to a new record of 75 percent of sales from 65 percent last year.

Trading expenses grew 8.1 percent, due to R200 million in additional costs related to the group’s Covid-19 operational response. They also reflected R200m in one-off compensation costs related to voluntary and structured employee severance programmes.

Gareth Ackerman, the chairperson of Pick n Pay, who presented the company’s financial results yesterday, said: “This has been an unprecedented and challenging year for everyone.

“We all had in March 2020 to adapt instantly to a new, digitised and constantly changing situation and ways of working.”

He bade farewell to Brasher and said the company had been transformed in his eight years as chief executive.