The Zimbabwean subsidiary of giant South African retailer, Pick n Pay, posted a R1,7 million loss for the half year to September 2020, a drastic slide from a profit of R77,8 million prior year comparable. Pick n Pay owns a 49 percent share of Zimbabwean supermarket chain, TM Supermarkets, with some of the operations in the country having rebranded to the parent entity.
At group level, Pick n Pay said foreign currency losses reduced earnings by R58 million while inflation reduced earnings by another R48 million, which was impaired.
The group anticipates its profit for the six month period under review to fall by around 60 percent due to trading restrictions arising from the Covid-19 pandemic as well as one-off costs. Reported headline earnings per share – which is the main profit measure in South Africa – for the 26-weeks to August 30, is expected to decline by between 36,61 cents and 45,64 cents from 91,28 cents in the 26-weeks ended September 1, 2019.
Management said reduced trading hours, limits on the number of customers in stores and temporary store closures following positive Covid-19 cases among staff negatively impacted on sales during the half year.
Said the group in trading update this week: “Trade restrictions imposed by the South African government, and by other jurisdictions across southern Africa, impacted up to 20 percent of the group’s revenue at different stages of the nationwide lockdown, and disproportionately affected higher-margin categories including liquor, clothing and general merchandise.”
As a result, group turnover rose marginally by 2, 6 percent, with like-for-like growth of 1 percent.
Liquor and tobacco sales fell 47,5 percent, while clothing sales decreased 4,2 percent in South Africa.
However, core retail sales, which include food, groceries and general merchandise, improved by 8,7 percent.
Pick n Pay is one of the largest retail chain stores in Zimbabwe with branches in all cities and major centres.