Ackerman family’s supermarket giant Pick n Pay scraps pay cuts for 22,000 workers

South Africa's Ackerman family's Pick n Pay Stores Ltd. has withdrawn a restructuring process covering about 22,000 store workers that could have cut their pay and benefits or led to dismissals, after reaching an agreement with its main labor union, and said its first-half loss will shrink by as much as half.

The Cape Town-based grocer told shareholders on Thursday that it had formally ended the consultation under Section 189A of South Africa's Labour Relations Act, the procedure companies must follow when they plan large-scale dismissals for operational reasons. The deal was struck with the South African Commercial, Catering and Allied Workers Union, known as Saccawu. Pick n Pay said it will give details of the agreement when it publishes interim results on Monday.

The company expects a loss per share of 33.77 cents to 40.52 cents for the six months to the end of August, an improvement of 40% to 50% from a loss of 67.53 cents a year earlier. The headline loss per share, the main profit measure in South Africa, which strips out one-off items, is expected to narrow by 25% to 35% to between 38.85 cents and 44.83 cents. Higher trading profit at Boxer, its discount chain, and a moderately smaller trading loss at the main Pick n Pay supermarkets drove the improvement.

The shares rose 4.8% to R21.15 in Johannesburg trading on Friday morning.

Why the talks began

Pick n Pay opened the consultation on May 4. The company said it was not seeking to retrench workers but wanted to change their working conditions to keep jobs and return the business to profit. Chief Executive Officer Sean Summers said the retailer's employment terms were "significantly more generous" than those of its competitors.

Saccawu said the proposals included scrapping the Sunday pay premium for full-time staff, rostering full-time workers on weekends, ending transport for employees whose shifts finish after public transport stops running, withdrawing subsidized meals and the annual 13th-cheque bonus, and cancelling older agreements with the union. It accused the company of using the threat of dismissals to force through changes that should be settled through collective bargaining.

Employment and Labour Minister Nomakhosazana Meth intervened in June and brought both sides back to the table. The Labour Court struck an application by the union from its roll, ruling that it was premature while consultations were still under way.

The Ackerman stake

The Ackerman family holds 135.35 million Pick n Pay shares through Ackerman Investment Holdings and related parties, about 18% of the ordinary shares, after selling 64 million shares at R25.50 each for R1.6 billion ($93 million at the time) in November last year. That sale cut the family's voting control to about 37% from 49%, ending its decades-long majority. At Thursday's closing price of R20.19, the family's stake is worth about R2.73 billion ($166 million). Pick n Pay has a market value of about R15.1 billion ($912 million).

Raymond Ackerman bought the business in 1966, when it had four stores in Cape Town, and built it into one of South Africa's largest supermarket chains. He died in 2023. His children Gareth, Suzanne and Jonathan Ackerman sit on the board as non-executive directors.

The family's position in the company has shrunk as Pick n Pay struggled. The group was technically insolvent in 2024, when its liabilities exceeded its assets after heavy losses. Summers, a former chief executive who returned to the job in 2023, led a rescue that included a R4 billion rights offer and the listing of Boxer on the Johannesburg Stock Exchange in November 2024. In May, Pick n Pay sold another 57.3 million Boxer shares for R4.7 billion, cutting its holding to 53.1%.

Over the three years to March 2026, the number of company-owned Pick n Pay stores fell to 992 from 1,007 and franchise stores fell to 620 from 722, as loss-making outlets were closed, sold to franchisees or converted to Boxer. Boxer grew to 576 stores from 477. Group turnover was R120.3 billion ($7.3 billion) in the year to March 1.

Summers will hand over to Spencer Sonn, a former head of Woolworths' food business, on Feb. 1, 2027.