We are grateful for the right of reply to the commentary that appeared in your editorial opinion last week, which contained assertions that require correction or context (“True shape of Pick n Pay turnaround”, May 27).
The writer made the statement that “the reduction in losses was achieved largely by aggressive cost cutting and a massive R12.5bn recapitalisation”. We would like to draw from our financial statements, which we believe were really clear, to provide the factual basis for the cause of this improvement.
- Group trading profit increased from R405m in the 2024 financial year to R1.759bn in 2025. This is a R1.354bn trading profit increase.
- The group net funding interest charge (primarily debt service costs) decreased from R609m to R443m. This is a R166m finance cost decrease.
- The group profit improvement was therefore a result of a R1.354bn trading profit improvement, with a R166m finance cost decline. Together, these two improvements total R1.52bn, of which the trading profit increase accounted for 89% of the improvement.
It is thus clearly demonstrated that the recapitalisation was only a small part of the profit improvement in the 2025 financial year (it will be a larger part in 2026).
With specific regard to the R1.354bn trading profit improvement, we would like to be clear what the source of this was. Group gross profit increased by 7.3% (from R20.28bn in financial 2024 to R21.764bn in 2025). So the entirety of the trading profit improvement was due to improved gross profit.
The writer also commented that “meeting a low bar is hardly a victory”. We never claimed it was. We emphasised that despite this being a major improvement there was much more work to do on the turnaround, so it is also perplexing given that we were abundantly clear about the turnaround plan announced last year.
We had clear deliverables in our plan, and we reported transparently on exactly how we had performed against them, meeting and tracking ahead of most.
Another comment was that we were “holding prices low to help prevent an exodus”. This is not so. The group increased its gross margin by 0.3% year on year, increasing the gross profit margin at Boxer and Pick n Pay.
We are proud that our prices are low for our customers, but if our sales growth was purely driven by price investment, as stated by the writer, our gross profit would have gone down, not up, as it did.
In closing, one of the significant conclusions in the editorial was that “Pick n Pay’s recovery looks financed rather than earned”. Again, this is not so. Just less than 90% of the recovery was operational, and 10% was due to the recapitalisation process.
The headline “True shape of Pick n Pay turnaround” seems to suggest that somehow our financial statements and accompanying commentary did not provide a true reflection of the shape of the turnaround. This, in turn, brought into question the credibility of our reporting, based on what appears to be inadequate analysis of our figures, which was a pity.
We remain at your disposal should the need arise for any clarity in our announcements.
Summers is Pick n Pay CEO.
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