Pick n Pay’s final set of results under outgoing CEO Richard Brasher showed an almost 20% drop in profit because of one-off retrenchment costs, Covid-19 costs and lockdown restrictions that led to R4bn in lost sales.
Trading bans in April and May 2020 meant that the retailer could not sell goods that had much higher profit margins than food. The government banned general merchandise and clothing sales at the end of March 2020, prohibited cigarette sales for months and enforced 19 weeks of an alcohol ban, in addition to weekend alcohol sales restrictions. The group spent R200m on voluntary and forced retrenchments in the first half of the financial year.
Food inflation hit 4.85% for the year and Pick n Pay reported price inflation of 3.85%, showing how retailers and suppliers continue to absorb the rising costs of food for cash-strapped consumers.