Ban on cigarettes and alcohol nailed Pick n Pay annual profits
Online sales jumped, with a 150% increase in active online customers
Retailer Pick n Pay reported a 21.4% decline in annual earnings on Wednesday, weighed down by a ban on the sale of alcohol and other products and by one-off compensation costs.
Headline earnings per share (Heps), the main profit measure in SA, for the 52 weeks ended February 28 fell to 229.31 cents from 291.90 cents. Comparable Heps, which excludes hyperinflation accounting, fell by 16.8%.
Group turnover growth of 4.3% was significantly affected by bans on the sale of alcohol, cigarettes and other tobacco products, which resulted in an estimated R4bn in lost sales.
Sales in core food and groceries in SA grew by 10%, while liquor and tobacco sales fell 31%. Clothing sales increased 1.3%.
Online sales jumped, with a 150% increase in active online customers, said the retailer, which also operates in Zimbabwe and Zambia, as people avoided crowded malls and shops.
Trading expenses grew 8.1%, due to R200m in additional costs related to the group's Covid-19 operational response.
Also reflected were R200m in one-off compensation costs related to voluntary and structured employee severance programmes.