Table of Contents
Key Points
- Pick n Pay streamlines operations, closing 40 underperforming stores to boost profitability in South Africa’s retail sector.
- Ackerman-backed retailer’s strategy signals shift in South African malls, raising vacancy risks and asset repurposing.
- Market confidence grows as Pick n Pay cuts losses 77.7%, attracting major investors like M&G Investment Managers.
Pick ‘n Pay, one of South Africa’s leading supermarket chains, partly owned by the billionaire Ackerman family, is spearheading a retail transformation that signals a major shakeup for the country’s shopping malls and commercial property sector. The group’s portfolio optimization reflects a growing trend toward efficiency and modernization in South African retail.
Strategic store downsizing to boost profitability
Under returning CEO Sean Summers, Pick n Pay is aggressively reviewing 100 stores, across the group, targeting loss-making outlets for closure, conversion, or sale and focus on core profitable outlets. Since implementing the strategy, the retailer has closed or converted 40 loss-making supermarkets, including 25 company-owned closures, seven franchise conversions, and eight rebranded as Boxer stores.
Summers emphasized the oversaturation of South Africa’s retail space, noting the country now rivals the US in retail square meters per capita. “Retailers too often open stores without sustainable demand, putting malls and leases at risk,” Summers said after releasing the company’s earnings.
By refocusing on core operations and shedding underperforming locations, Pick n Pay aims to streamline logistics, reduce overheads, and improve margins—key to its goal of returning to sustained profitability.
Impact on South African shopping malls and property owners
John Jack, CEO of Galetti Corporate Real Estate, views Pick n Pay’s move as a wake-up call for mall owners and landlords. “Retailers are reassessing leases, trading densities, and growth potential across their portfolios,” Jack said. “This means malls with weak anchor tenants could face increased vacancy risks or repurposing.”
Jack noted that conversions to Boxer and stronger franchise partnerships are part of a broader trend to optimize retail assets rather than outright closures. “Some sites may even shift to government or community use—signaling innovation in asset repositioning,” he added. This evolution mirrors patterns in Europe and the US, where retailers have prioritized quality over quantity of stores, driving digital transformation and new retail formats.
Pick n Pay’s financial turnaround and market confidence
Despite challenges, Pick n Pay remains South Africa’s second-largest grocery chain after Shoprite, with over 2,000 stores across eight African countries. The Ackerman family holds a 25.53 percent stake, signaling strong insider confidence.
The retailer cut its full-year loss by 77.7 percent to $42.4 million, driven by Boxer’s growth and operational efficiencies. Fresh investments include a new supermarket at Westown Square in KwaZulu-Natal, targeting convenience and quality. Supporting the turnaround, M&G Investment Managers increased its stake from 0.43 to 10.16 percent, holding more than $115 million in shares—a vote of confidence in Pick n Pay’s ability to adapt in a shifting retail landscape.
