Retailer Pick ‘n Pay say its half-year profits before tax grew by 19.1%. It announced a profit of more than R670 billion before tax.
The retailer has attributed its profits to its price cut strategy which is said to have brought more customers to its stores.
Pick ‘n Pay is the second-biggest grocery store chain in South Africa.
The volatile rand and fuel increases have meant that retailers are operating in an increasingly tough economy.
But Pick ‘n Pay managed a 6.7% growth in the first half of the year.
Pick n Pay CEO Richard Brasher says, “We made some brave decisions 18 months ago which is why our results are better today. So, we had to contract our costs, run our business more efficiently and give people low prices and therefore, I am proud of what the team has done.”
The retailer says it wants to continue with the momentum it has achieved, irrespective of the economy.
The focus is giving people what they want where they are.
The retailer says value added services such as customers being able to buy electricity and pay their bills inside the store are some of the services that have been well received by customers.
Non-South African countries also grew in the first half of the year, increasing revenue by 7.9%.
“We saw steady improvement, but it’s tough. Investing in Africa is an important long-term strategy that we still believe in, but we have to be measured and of course, with the urban flow of different economies, whether it’s in Zambia or Zimbabwe and other countries we have to be prudent.”
Right across the retail trade inflation has been lower.
This is because the price of commodities, especially maize has been a lot lower in the last year than it was the year before.
Pick ‘n Pay say it also drove inflation down by having more promotions on its products.
But most importantly the retailer says it kept its prices down and its looking to do more of this in the second half of the year.
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