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South Africa-based Pick n Pay reports its strongest six-month trading performance for five years. The retailer also extends its partnership with BP to benefit its loyalty programme customers.

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South African department store chain Woolworths has upgraded its mobile app to enable in-app shopping. Woolworths hopes the new feature will create a fully integrated customer experience and increase sales.

Mobile transactions have increased 64%

The retailer has invested in its mobile app to meet the growing demand for ecommerce. It has experienced a 64% increase in mobile transactions from 2017 to 2018 and mobile now contributes to 60% of the site traffic.

In-app shopping

Woolworths’ upgraded app lets customers create shopping lists, view in-store stock levels, manage financial services and check loyalty points. Customers can also use the app to scan product barcodes and add them to their online basket.

Since updating the app in 2016, Woolworths has experienced a 50% increase in the number of in-app registrations year-on-year. It is hoped that the in-app shopping feature will encourage further growth.

Online shopping projected to grow by 19%

Woolworths has predicted that online shopping in South Africa will grow by 19% in 2018. It is also expected that local websites will generate approximately ZAR18bn ($1.28bn) worth of sales. Online shopping is largely dominated by clothing, homeware and ticket retailers. This is well established in the market, whereas online grocery shopping is still a recent phenomenon.

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Pick n Pay has helped entrepreneurs, Armien and Yasmina Adams, open Something Nice Market in Blue Downs. This marks the third store in Cape Town to be opened under Pick n Pay’s spaza modernisation programme.

The spaza modernisation programme

Pick n Pay’s programme helps retail entrepreneurs to meet the growing needs of local communities by modernising their spaza stores. Pick n Pay equips the spaza stores with new technologies, branded products and refrigeration. Entrepreneurs are also offered training and advice but remain independent.

The modernisation programme was first piloted in Gauteng in 2016. Since then, 14 stores have been opened in this area. The Something Nice Market store is the third store to be modernised in the Western cape. 

Something Nice Market

In May 2018, the Adams were selected by Pick n Pay to participate in the modernisation programme. Their 300 sq m store was restyled and supplied with a new butchery and 1,300 lines of fresh produce, perishables and non-food products. The store also comprises bill payments, data, lottery tickets and money transfer services. The Adams will continue to provide their own bakery goods and hot food deli selection.

Empowering communities

Richard van Rensburg, Pick n Pay deputy CEO, explained that the programme aims to empower the retail entrepreneurs which, “in turn helps empower communities through employment, supplier development and access to outstanding retail shops”. Pick n Pay will continue to transfer skills and ownership to retail entrepreneurs in South Africa.

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South Africa-based Pick n Pay has released a trading statement as it finalises its H1 2019 financial year results. The announcement says it has enjoyed turnover growth of 6.4%, while its diluted headline earnings per share for the timeframe would come in between 95.43 and 100.88 cents per share, compared with a restated 54.53 cents per share in 2017.

Statement reveals positive performance

Pick n Pay said while group turnover rose 6.4% in H1, its South Africa division outperformed, with turnover rising by 6.7%. The pace of growth in its home market enabled the retailer to say that it had enjoyed ‘clear market share growth over the period’.

The strong performance came despite the challenging market, economic and constrained consumer spending in South Africa and some of its key markets across Africa. Separately the retailer said that like-for-like turnover growth rose 3.8%, with internal inflation at only 0.3%, this meant that volume growth, of 3.5%, drove its like-for-like performance.

Long-term strategy helping to drive growth

Pick n Pay has been rolling out a strategy for growth, which it has been embedding over the last year. It said its recent profitable performance had ‘benefited from the decisive action it took last year to create a leaner and fitter business, equipped to compete effectively in an increasingly tough trading environment’. The retailer went on to underline the importance of its long-term, strategic focus, given that it did ‘not expect trading conditions to ease significantly over the coming months’.

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This in-depth guide to South Africa explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

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