Pick n Pay's mistake regarding its disposal of Franklins was to make everyone aware of it, according to an analyst.

"They put Franklins on the block and now it's a bit of a forced sale. What they needed was a smooth, quick deal; it's a headache that just doesn't seem to be going away for them," the analyst added.

The retailer said on Friday it had agreed to extend the cut-off date for its R1.5-billion sale of Franklins to Sydney-based Metcash. The companies are still awaiting judgment in their federal court action with the Australian Competition and Consumer Commission.

This is the second extension since Pick n Pay first announced last July that it had decided to sell its 80 corporate stores and eight franchise agreements in Australia.

The commission believes the deal could mean a significant lessening of competition through the removal of Metcash's closest competitor in the New South Wales groceries sector.

The cut-off date has been extended from June 30 to July 31.

Pick n Pay chairman Gareth Ackerman said the group disagreed with the commission's assertions, adding that it was confident in the merits of its legal arguments.

"We remain confident our arguments will ultimately prevail."

Meanwhile, the company is pressing ahead with its African expansion plans.

"Our two stores in Zambia are trading exceedingly well and in late June we will open our first store in Mozambique," Ackerman said.

Pick n Pay also plans to open a store in Mauritius later this year.

Locally, the group aims to open a further 12 new corporate and seven new franchise supermarkets, as well as 10 clothing stores and 45 liquor stores this year.

In its Boxer stable, the group plans to open 13 new supermarkets, seven Punch stores, five liquor stores and five Boxer Builds.

CEO Nick Badminton said the group had noted that food inflation was beginning to creep upwards.

"Our gross margins are recovering, although we are experiencing pressure on operating expenditure given that this is an investment year and we are seeing structural cost pressure such as water and electricity.

"Working capital continues to be tight," Badminton said. - I-Net Bridge