RetailAnalysis
18 April 2017
Pick n Pay evolves Smart Shopper, flags FY profit rise

In different announcements, South Africa-based Pick n Pay is evolving its Smart Shopper loyalty programme, while separately it has said it is expecting its full year Headline earnings per share to increase by between 15% to 20%.

Changes to Smart Shopper

Evolving the scheme, Pick n Pay has said shoppers will need to spend ZAR200 (c. US$15.0) to get ZAR1 (US$0.07) back, versus ZAR100 (c. US$7.50) previously. This means that the cash back rate has been cut from 1% to 0.5%.

Pick n Pay's Smart Shopper programme has been hugely successful since its launch in 2011 and has played a key role in the company's recent turnaround, by helping informing decisions that have underpinned top-line performance. The programme has  also provided Pick n Pay with more insight on its shoppers, while also supplying insight into stock management information, which has been particularly important as it switched to a centralised distribution model.

Savings to be invested in new discounts

Pick n Pay announced the change to its Smart Shopper programme following on from its investment in prices. The retailer has previously said that it has struggled to find a way to balance offering the promotions customers want, while also protecting its margins. The switch of investment from its Smart Shopper programme into these new discounts will help it to tackle this.

Discussing the changes, David North, Pick n Pay's Group executive of strategy and corporate affairs, said that the recent initiatives demonstrate the company’s commitment to giving shoppers more value.

Headline earnings per share to increase in FY2017

Ahead of its full year results announcement, Pick n Pay said that it is expecting its headline earnings per share to increase by 15% to 20%. The retailer said that the result underlines how it is 'delivering a balanced and sustainable recovery'. It highlighted how it is driving 'greater operating efficiency... in the strong discipline on cost, more centralised supply chain and higher productivity in stores'.

It went on to say that it was expecting to report turnover growth of 7.0%, which it said reflected 'a difficult trading environment, alongside some internal disruption from refurbishments and store closures which are improving the quality of the estate'.

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