Johannesburg - Pick n Pay Stores said first-half earnings rose as South Africa’s second-largest supermarket chain attracted cash-strapped shoppers with discounted goods and opened new stores.

“Despite unfavourable economic conditions, customers get up in the morning and shop for food,” CEO Richard Brasher said in a presentation in Cape Town on Tuesday. To win or retain shoppers, the grocer is offering promotions and extending its lower priced own-brand range, the former Tesco executive said. The retailer has also introduced smaller sizes on several products.

The initiatives are helping Pick n Pay tackle challenges facing South African retailers that include weak domestic consumer confidence, rising interest rates and unemployment of 27 percent. The shares rose 2.9 percent to R67.95 by 11:22 a.m. in Johannesburg, on track for the biggest gain since September 22.

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Pick n Pay’s profit increased 18 percent to R381.8 million ($27 million) in the six months through August 28, the Cape Town-based company said in a statement. Sales rose 7.2 percent and the interim dividend increased 24 percent to R2.99 a share. The retailer opened 74 Pick n Pay and mostly rural Boxer stores in the period. It trails Shoprite Holdings in terms of market share in Africa’s most industrialised economy.

The high levels of food inflation seen in recent months are beginning to ease and Pick n Pay’s long-term plan to become more efficient, improve profit margin and increase sales remains on track, Brasher said. The retailer’s efforts to cater to lower income customers will be extended as it accelerates the opening of its Boxer stores, he said. The company added 15 new Boxer stores in the first-half.

Pick n Pay opened seven new supermarkets outside South Africa in the six-month period, in Namibia, Zambia and Zimbabwe. The company plans to enter Ghana next year and Nigeria in 2018.

BLOOMBERG