South African supermarket chain Pick n Pay Stores has said that half-year profit before tax jumped 19.1%, as price cuts attracted more shoppers to its stores.
The country's second-biggest grocery store chain reported profit before tax of 670.2 million rand (€40.4 million) for the six months ended August, compared with 562.8 million rand (€34.31 million) in the same period last year, on a normalised basis.
South African shoppers are feeling the impact of low growth in disposable income, little to no job creation, and tight credit conditions.
To keep attracting struggling consumers, Pick n Pay reduced prices across 2,500 everyday grocery lines.
"We have invested heavily in our customers, just when they need it most," chief executive Richard Brasher said in a statement.
"We've reduced prices of key grocery lines, delivered a more compelling fresh-meat and -produce offer, and given our customers simpler and more personalised promotions," added Brasher.
Like-for-like sales climbed 3.8% – more than double the previous half-year's growth. Total sales rose to 41.2 billion rand (€2.51 billion) – up 6.4%.
A voluntary redundancy programme to cut costs and create a leaner group also helped its performance.
Normalised headline earnings per share climbed 17%, to 100.18 cents, the retailer said.
It declared an interim dividend of 39.10 cents per share, up 17.1%.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.