Pick n Pay falls most in a year after warning investors of wider 2026 losses

Pick n Pay’s share price fell the most in a year on Tuesday, making it the worst performer on the JSE, after the retailer warned its losses for the 2026 financial year will be larger than previously expected.

The sell-off followed a trading update in which the group said its headline loss per share for the year is expected to worsen by more than 20% compared with the previous year after weaker-than-expected trading over the festive season. Boxer Retail, the group’s discount business, was also one of the day’s biggest losers, with its share price down almost 3.65% to R69.73.

“The expected increase in the 2026 financial year loss per share ... is due to below-expectation turnover, impacting on the group’s previous guidance,” the retailer said.

For the 48 weeks to February 1, group turnover rose 3.2%, but growth slowed in the second half of the year. Pick n Pay said November trading was particularly poor, reflecting pressure on consumers.

Pick n Pay South Africa grew like-for-like sales 2.9%, but overall sales fell 1.4% as the group continued to close or convert underperforming stores.

Boxer, its discount business, performed much better, with sales up 11.9%. Boxer said last week sales were strong in September and October, followed by a weaker November as consumers came under strain during the extended Black Friday period. Trading conditions improved gradually in December and January, but not enough to offset November’s performance.

The weak November is in line with earlier warnings from research firm NIQ, which said Black Friday sales were likely to be flat. It said Black Friday has become overcrowded, with fewer real bargains and shoppers more careful with their money.

NIQ said consumers are comparing prices earlier, avoiding deals that do not offer real savings, and focusing their spending on basic needs rather than nonessential items. Competition is toughest in the lower- and middle-income market, where shoppers are most sensitive to price.

Pick n Pay said: “The performance over the latter 22 weeks of the period was below expectation and the result of a highly constrained market, particularly over the extended Black Friday period.”

Clothing sales were also weak in the second half but returned to growth in January.

“Like-for-like sales momentum is back on a growth trajectory for PnP SA Supermarkets and recovered to mid-single-digit growth in Pick n Pay Clothing over January.”

The retailer said it has made real improvements in how the business runs, but recovery will take time.

“While the expected 2026 financial year loss is a disappointment, the group notes the substantial on-the-ground operational improvements that have been achieved to date and that the Pick n Pay segment’s trading profit recovery will not be linear. Despite the macro challenges, the group continues to deliver on the strategic initiatives designed to return the Pick n Pay segment to profitability.”

Pick n Pay’s share price lost as much as 14.8% in intraday trade but by market close it was down 9.87% to R20.82.

The stock has had a rough start to the year, falling by more than 16%, while Boxer shares are down just 2.2% over the same period.

The group will release its full-year results in late May.