Retail giant Pick n Pay yesterday reported that it lost an estimated R4 billion in sales as a result of the ban on alcohol sales during the nationwide lockdown in the 52 weeks to the end of February. Picture: Reuters / Mike Hutchings
Retail giant Pick n Pay yesterday reported that it lost an estimated R4 billion in sales as a result of the ban on alcohol sales during the nationwide lockdown in the 52 weeks to the end of February. Picture: Reuters / Mike Hutchings

Pick n Pay reports R4bn in lost sales due to booze ban

By Dineo Faku Time of article published Apr 9, 2021

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JOHANNESBURG - RETAIL giant Pick n Pay yesterday reported that it lost an estimated R4 billion in sales as a result of the ban on alcohol sales during the nationwide lockdown in the 52 weeks to the end of February.

Pick n Pay – whose brands include Pick n Pay Supermarkets, Pick n Pay Liquor and Boxer stores – recorded turnover growth of 4.3 percent during the year after being hit severely by the lockdown.

The group said it lost 209 liquortrading days over the financial year, including 126 days in the first half, and 83 days in the second half, amid reduced trading hours in all but three weeks of the financial year. The retailer was also hurt by the ban on the sale of cigarettes and other tobacco products between March 27 and August 17.

“These measures together had a profound impact on liquor and tobacco sales in South Africa, with negative growth of 31 percent over the year,” said Pick n Pay.

Although clothing sales were prohibited during level 5 of the lockdown and were subject to some restrictions during level 4, the retailer's clothing sales increased 1.3 percent year-on-year, with 6.7 percent growth in the second half of the year. “The group's high-quality and affordable clothing proposition continues to deliver market share growth in several key categories,” said Pick n Pay.

Despite the lockdown disruption, Pick n Pays flagged a 10 percent increase in sales growth at its core food and grocery offer in South Africa, saying that the performance demonstrated strong like-for-like volume growth, and was testament to sustained improvements in the group's customer offer.

Headline earnings were expected to slide by 15 to 25 percent to betweeen 218.93 cents to 248.12c.

Pick n Pay said earnings had tumbled, owing to the lockdown restrictions, as sales were also knocked by reduced trading hours, limits on the number of customers in stores to uphold physical distancing requirements, and by some temporary store closures following the identification of positive Covid-19 cases among staff.

Its operating expenses would reflect R200 million costs related to the Covid-19 response, including R150m in the first half and R50m in the second half. Pick n Pay recorded R130m in safety and hygiene measures and paid a R50m appreciation bonus for frontline staff in the first half and a further R20m for security and communication costs. It also said it paid R100m in once-off compensation for employees who volunteered for the voluntary severance packages in the first half of the year.

Pick n Pay shares closed 0.60 percent lower at R54.30 on the JSE yesterday.

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