Pick n Pay posts 5% increase in sales - with strong growth in clothes, booze Pick n Pay grew its sales by more than 5% over the past year, with its clothing division seeing 21% growth and the group’s liquor sales increasing by more than 57%. The latter is despite the loss of 66 liquor trading days due to alcohol sales bans. In the previous year, it lost more than 200 days. In a trading update for the year ended 27 February 2022, the retailer said its group sales grew by 5.2% to R97.9 billion. This is despite the impact of the civil unrest in July 2021, which cost the retailer around R1.8 billion. "[The] disruption as a result of damage to and closure of stores in the civil unrest, combined with the loss of the liquor trade, was most evident in [the second quarter], with sales growth falling to -0.7% for the quarter. "The group was disproportionately impacted by the civil unrest relative to the market, as its concentration in KwaZulu-Natal and Gauteng struck at the heartlands of the group’s high performing Boxer and Pick n Pay Value businesses," said Pick n Pay. However, in the third quarter, the retailer showed a recovery from the unrest, with sales growth of 4.9%, which it attributed to reopening more than 180 damaged stores between July and November 2021. It also saw a strong Black Friday. In the final quarter of its financial year, sales increased by 7.4% thanks to a strong festive trade performance. Apart from strong growth in liquor and clothing sales, it was also solid growth in its delivery service app ASAP!, which was launched in August 2021. "ASAP! is only one element of the group’s online retail offer, which includes its traditional scheduled delivery service and a Click n Collect offer. The group’s combined online offer has delivered compound annual growth of 72.5% over the past two years," said Pick n Pay. Pick n Pay, which is due to release its annual results in May, expects its headline earnings per share to increase between 8% and 18%. Its share price rose by more than 6% on Wednesday. Reflecting on the group’s performance, Pick n Pay’s CEO Pieter Boone said: "We have delivered a resilient trading performance in some of the most difficult circumstances the group has ever faced ... our growth in the first quarter, and again in our final quarter, shows that our underlying momentum remains solid." In the past year, Pick n Pay opened 138 new stores. QUESTION 1 With reference to the article, discuss the macro-environmental issues at play that have impacted on Pick n Pay and its business.
Pick n Pay posts 5% increase in sales - with strong growth in clothes, booze
Pick n Pay grew its sales by more than 5% over the past year, with its clothing division seeing 21% growth and the group’s
liquor sales increasing by more than 57%. The latter is despite the loss of 66 liquor trading days due to alcohol sales bans.
In the previous year, it lost more than 200 days.
In a trading update for the year ended 27 February 2022, the retailer said its group sales grew by 5.2% to R97.9 billion. This
is despite the impact of the civil unrest in July 2021, which cost the retailer around R1.8 billion. "[The] disruption as a result
of damage to and closure of stores in the civil unrest, combined with the loss of the liquor trade, was most evident in [the
second quarter], with sales growth falling to -0.7% for the quarter.
"The group was disproportionately impacted by the civil unrest relative to the market, as its concentration in KwaZulu-Natal
and Gauteng struck at the heartlands of the group’s high performing Boxer and Pick n Pay Value businesses," said Pick n
Pay.
However, in the third quarter, the retailer showed a recovery from the unrest, with sales growth of 4.9%, which it attributed to
reopening more than 180 damaged stores between July and November 2021. It also saw a strong Black Friday. In the final
quarter of its financial year, sales increased by 7.4% thanks to a strong festive trade performance.
Apart from strong growth in liquor and clothing sales, it was also solid growth in its delivery service app ASAP!, which was
launched in August 2021. "ASAP! is only one element of the group’s online retail offer, which includes its traditional
scheduled delivery service and a Click n Collect offer. The group’s combined online offer has delivered compound annual
growth of 72.5% over the past two years," said Pick n Pay.
Pick n Pay, which is due to release its annual results in May, expects its headline earnings per share to increase between
8% and 18%. Its share price rose by more than 6% on Wednesday.
Reflecting on the group’s performance, Pick n Pay’s CEO Pieter Boone said: "We have delivered a resilient trading
performance in some of the most difficult circumstances the group has ever faced ... our growth in the first quarter, and
again in our final quarter, shows that our underlying momentum remains solid."
In the past year, Pick n Pay opened 138 new stores.
QUESTION 1
With reference to the article, discuss the macro-environmental issues at play that have impacted on Pick n Pay and its
business.
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