Pick n Pay overcomes challenges, consumers struggling with disposable income

Consumers are under 'extreme pressure' and their situation has worsened, says Summers

- EDWARD WEST

SOUTH Africa's consumers are under "extreme pressure," and their situation may even have worsened since the sixmonth period to August 31, Pick n Pay's CEO Sean Summers said Monday.

The group, which has closed a net 60 supermarkets in South Africa as it moves to regain profitability, yesterday released interim financial results that showed its turnaround gathering momentum, with trading profit up 273.5% to R310 million from R83m. This follows a turnover increase of 4.9%, with like-for-like (LfL) sales up by 4.7%.

Summers said in a telephone interview that given the pressure consumers are facing with a lack of disposable income, he was concerned that up to R1 billion a month is being taken offshore through online gambling.

There are estimates that up to 20% of government social grants are spent on online gambling, which could have been used for food. He said many other countries, such as Italy, Norway, and Belgium, had taken steps this year to curb online gambling.

Pick n Pay's share price fell hard by 7.39% on the JSE in the afternoon after it reported that the group break-even is likely to be a multiyear project.