Pick n Pay Profit Rises As Discounts Lure South African Shoppers
Pick n Pay Stores Ltd has said that first-half earnings gained 18% as the South African supermarket chain attracted shoppers with discounted goods and opened new stores.
Profit increased to 381.8 million rand ($27 million) in the six months through 28 August, from 322.5 million rand a year earlier, the Cape Town-based company said in a recent statement. Sales rose 7.2%, and the retailer opened 74 Pick n Pay and mostly rural Boxer stores in the period. The company raised the interim dividend 24%, to 2.99 rand a share.
“[Pick n Pay] is encouraged that the high levels of food inflation seen in recent months are beginning to alleviate,” the company said. Chief executive officer Richard Brasher’s long-term plan of becoming more efficient, improving profit margin and increasing sales remains on track.
South African retailers are facing challenges including weak domestic consumer confidence, rising interest rates and unemployment of 27% in an economy that’s growing at the slowest pace since a 2009 recession.
Pick n Pay shares rose 1.8% to 66.04 rand by the close in Johannesburg on Monday, the biggest gain since 22 September.
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