Pick n Pay posts 5% increase in sales – with strong growth in clothes, booze

Pick n Pay grew its sales by more than 5% over the past year, with its clothing division seeing 21% growth and the group’s liquor sales increasing by more than 57%. The latter is despite the loss of 66 liquor trading days due to alcohol sales bans. In the previous year, it lost more than 200 days.
In a trading update for the year ended 27 February 2022, the retailer said its group sales grew by 5.2% to R97.9 billion. This is despite the impact of the civil unrest in July 2021, which cost the retailer around R1.8 billion. “[The] disruption as a result of damage to and closure of stores in the civil unrest, combined with the loss of the liquor trade, was most evident in [the second quarter], with sales growth falling to -0.7% for the quarter.

“The group was disproportionately impacted by the civil unrest relative to the market, as its concentration in KwaZulu-Natal and Gauteng struck at the heartlands of the group’s high performing Boxer and Pick n Pay Value businesses,” said Pick n Pay.
However, in the third quarter, the retailer showed a recovery from the unrest, with sales growth of 4.9%, which it attributed to reopening more than 180 damaged stores between July and November 2021. It also saw a strong Black Friday. In the final quarter of its financial year, sales increased by 7.4% thanks to a strong festive trade performance.
Apart from strong growth in liquor and clothing sales, it was also solid growth in its delivery service app ASAP!, which was launched in August 2021. “ASAP! is only one element of the group’s online retail offer, which includes its traditional scheduled delivery service and a Click n Collect offer. The group’s combined online offer has delivered compound annual growth of 72.5% over the past two years,” said Pick n Pay.
Pick n Pay, which is due to release its annual results in May, expects its headline earnings per share to increase between 8% and 18%. Its share price rose by more than 6% on Wednesday.
Reflecting on the group’s performance, Pick n Pay’s CEO Pieter Boone said: “We have delivered a resilient trading performance in some of the most difficult circumstances the group has ever faced … our growth in the first quarter, and again in our final quarter, shows that our underlying momentum remains solid.”
In the past year, Pick n Pay opened 138 new stores.

Source: Mashego, P. Pick n Pay posts 5% increase in sales. [Online] Available from: https://www.news24.com/fin24/companies/retail/pick-n-pay-posts-5-increase-in-sales-with-strong-growth-in-clothes-booze- 20220406 [Accessed July 2022]
Answer ALL the questions in this section.

QUESTION 1 (20 Marks)

With reference to the article, discuss the macro-environmental issues at play that have impacted on Pick n Pay and its business.

QUESTION 2 (10 Marks)

Using your theoretical knowledge and with reference to Pick n Pay, discuss how such an organisation can achieve a competitive advantage.

QUESTION 3 (10 Marks)

What drivers of the retail industry are affecting Pick n Pay?

SECTION B [60 Marks]

QUESTION 4 [20 Marks]

Consider the financial services organisation of your choice. Discuss the types of risks that the chosen organisation will face that it should prepare for.

QUESTION 5 [20 Marks]

Using relevant examples, critically discuss the concept of benchmarking which is key in strategy evaluation and include the benchmarking process.

QUESTION 6 [20 Marks]

Implementation is deemed the most challenging stage of the strategic management process. Using examples of your choice, recommend the factors that should be considered to ensure the effective implementation of their chosen strategy.

QUESTION 7 [20 Marks]

Discuss the importance and implications of the industry life cycle. Provide examples in your answer.

Answers to Above Questions

Answer 1: The full scale ecological issues that have affected Pick n Pay and its business are dangers of cataclysmic events, legitimate issues, political effects, and social issues. The dangers of cataclysmic events are obvious for the production lines and capacity distribution centers as the organization encounters the twister influence on the stores present in KwaZulu-Natal and Gauteng regions. These effect the conveyance of administrations gave to the shoppers present in the associations.


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