Pick n Pay plans new stores, jobs

South Africa's Pick n Pay plans to employ 5,000 people a year as it opens new stores in Africa's most advanced economy, the retailer said on Monday.

Pick n Pay, which opened around 100 grocery stores last year despite subdued retail sales and gross domestic product (GDP) growth of 2 percent, is aiming for "a bit more this year" Chief Executive Richard Brasher said.

Pick n Pay employs around 36,000 staff.

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"Most of these jobs will be in our new stores," Brasher, a former UK head of Tesco, told Reuters.

Bigger rival, and market leader, Shoprite said in February it had employed almost 7,000 more people in the six months through December in several new outlets.

Shoprite also said it plans to open 91 new supermarkets in South Africa in the next 18 months.

Pick n Pay has lost ground to Shoprite and other rivals in the last few years after failing to invest in new stores and paying out much of its profit as dividends.

Stanlib Chief Economist Kevin Lings said the retail sector was still employing people while the rest of the economy is feeling the crunch, reflecting the length of time it takes to build and open stores.

"You will start to see losses as expansion continues and the market reaches saturation," he said, adding that the smaller independent retailers will suffer first.

South Africa's government is desperate to create jobs in a nation where the unemployment rate stands at around 25 percent.

Mining firms Lonmin and Kumba Iron Ore warned last week that thousands of jobs could be shed as commodity prices hover around their lowest levels this decade.

Steelmaker Evraz Highveld Steel and Vanadium said last week it has halted its operations in the country, while ArcelorMittal South Africa has asked the government to raise duties on cheap steel imports from China or risk the closing of a plant that employs 11,000 people.