JOHANNESBURG Reuters supermarket group Pick n Pay said on Wednesday its four-month sales grew by 6.4%, but its like-for like sales growth in South Africa was softer, impacted by store revamps and unprecedented power cuts in the last quarter of 2022.
Shares of Pick n Pay, South Africa's second biggest supermarket chain, fell 5% to 49.63 rand at market open, as it warned of additional cost pressures.
The investment plan was launched last year to better target its stores by customer incomes, modernise their look and add more shops.
It said that the plan, along with a significant increase in power cuts, disrupted South African sales as like-for-like sales grew by just 2% in the 17 weeks ended December 25, with selling price inflation of 10%. Sales of the company increased by 6.1%.
The group has had to deal with a much more difficult trading environment recently, with unprecedented load shedding power cuts and a further downturn in the economy, according to the retailer.
It's inevitable that load shedding has had an impact on customer service, with some impact on turnover. There are the significant unplanned costs associated with running localised power generation for stores. Pick n Pay spent an additional 346 million rand $19.79 million year-on-year on diesel to run generators in the first 10 months of the financial year and is currently on a run rate of approximately 60 million rand per month.
The group previously guided the market to expect flat annual earnings, but in October it said that external headwinds, including power cuts, would have an additional impact on its results, which it will announce in May.
There has been a further escalation in load shedding since, resulting in additional cost pressure, it said.