Pick n Pay’s profits and market share fall
A lot of news sources are talking about Pick n Pay’s profit decline.
Yesterday they posted a 18.4% decline in full year profit (source).
There seem to have been a number of challenges - they are getting squeezed at the top by Woolworths and squeezed at the bottom by Shoprite. Shoprite and Spar have both been more responsive to the rural market growth. They have also been hit hard by strikes and have far higher labour costs than Shoprite (source).
All of which makes the push to the Smart Shopper card and the Discovery linked Healthy Food programme make more sense. Except that both of are bit more attuned to the upper end of the market, which is not where they have the most capacity to grow. Shoprite are also winning the push into Africa.
University of Cape Town