Pick n Pay, one of South Africa’s largest retailers, says it has taken action on management salaries as its restructuring process gathers pace.
CEO Sean Summers was commenting on the retailer’s financial performance for the 52 weeks ended 1 March 2026 on Monday. He reassured shareholders that its turnaround strategy remains firmly on track, supported by improving topline growth, renewed operational disciplines and careful cash management.
“While Pick n Pay’s financial year 2026 trading loss increased, the business today is fundamentally stronger than it was two-and-a-half years ago as a result of the action we have taken and the investments we have made,” he said.
Pick n Pay on road to profitability
Summers added that the business’s balance sheet supports its return to profitability, “but achieving break-even at Pick n Pay requires the successful execution of all six strategic initiatives, including the recalibration of our total employment costs.”
This follows the retailer receiving backlash for deciding to embark on a section 189 consultation process.
“We are now taking the difficult but necessary step of addressing our structurally high store labour costs through the formal Section 189 consultation process announced a few weeks ago. This should come as no surprise.
“One of the first issues I raised on my return was that we needed to address Pick n Pay’s significantly distorted labour cost base relative to competitors, a major cost block.”
Pick n Pay promises to safeguard jobs
He said the company remains committed to safeguarding the jobs of its employees.
“Our objective is clear: to align our cost structure with industry standards while safeguarding jobs wherever possible.
“As an alternative to retrenchments, we have proposed a fair and competitive labour model that we believe offers a sustainable solution for all affected employees. Over multiple years, successive labour concessions have materially compromised our cost base, and this is now critical to address as we remain loss-making.”
Summers added that the process is not about reducing the retailer’s workforce but about ensuring the business’s long-term viability and protecting future employment.
The only way out
He said this process is one of the best ways to return Pick n Pay back to profitability. “Without this recalibration, we cannot solve the group’s cost base or return the business to profitability in a thin-margin industry.
“We have engaged with organised labour structures on this issue for more than two-and-a-half years without progress and are now in a formal consultative process with our labour partners (the unions) and with those employees directly that do not have union representation.
“The process is being facilitated by the CCMA. I am confident we will make our way through this with our labour partners.”
Labour union, the South African Commercial, Catering and Allied Workers Union (SACCAWU), previously said Pick n Pay must look at restructuring management’s pay packages. Summers said this has already been done.
“To be abundantly clear, we have already taken action on our management and support office staff costs, with a salary freeze, alongside the implementation of a future-fit structure that has seen a significant reduction in headcount. The bulk of our labour cost is incurred in stores and operations, and it is now time to deal with this remaining major cost block.”
Financial year highlights
- Group turnover increased 3.4% (52/52w basis), with 12.3% growth from Boxer and a 1.6% decline from Pick n Pay as a result of store closures under the store reset
- Company-owned Pick n Pay supermarkets recorded like-for-like sales growth of 3.9%
- PnP SA internal selling price inflation at 1.9% – well below CPI food inflation of 4.4%, with deflation in Boxer at -1.2%
- Online business recorded a strong financial year 2026, with turnover increasing by 32.7% (52/52w basis).
- Gross profit margin expanded 0.5% to 18.8%, with improvements in both Pick n Pay and Boxer
- Group trading profit declined 4.2% to R1.7 billion, due to the combined result of a R330 million increase in Boxer trading profit (to R2.6 billion) and a R404 million increase in the Pick n Pay trading loss (to R1 billion).
- While the Pick n Pay segment reported a larger FY26 trading loss compared with FY25 as it continued to reposition the supermarket business, the group reduced its headline loss by R45 million to R363 million.
