The ripple effects of Pick n Pay's downsizing

They hope it will be good for them, but what about the impact on the industry at large?

- JOHN JACK

PICK n PAY's strategic downscaling marks a turning point for the South African retail sector.

Under the leadership of returning chief executive officer, Sean Summers, one of the country’s largest retailers is undergoing a significant ‘back to basics’ reset, which includes the closure or conversion of more than 100 underperforming stores and the closure of more than 30 stores to date.

The retail giant is not just downsizing for the sake of it—this is about cutting back to the core and building a leaner, more profitable machine that can actually respond to where the market is now, rather than where it was five years ago.

Post a R4 billion rights issue, Pick n Pay listed their discount arm, Boxer. The listing raised R8.5 billion, and Pick n Pay will retain a 65.6% stake.

Boxer is the kind of retail model that more players should be watching. It’s stripped-down, high-efficiency format is the future of South African retail, especially with stretched consumers.

The brand’s expansion appears to be smart, focused, and cost-effective.

The property play

Cut what doesn’t work, double down on what does