Annual Report




Our six capitals

Our ability to create long-term sustainable value for stakeholders depends on the use of various capitals within our business. The International Integrated Reporting <IR> Framework supports integrated financial reporting, and, in particular, the reporting of the Group's business model across these six forms of capital. Refer to "Our business model" on pages 20 to 21 for more information.




Social and relationship



Our key stakeholders

The Group is committed to open and constructive engagement with all our stakeholders. Our business model and strategy are designed to consider and address the issues and concerns most relevant to our key stakeholders. Refer to the "Engaging with our stakeholders" section on pages 38 to 41 for more information.







Our business acceleration pillars

The second stage of our strategic long-term plan is organised around seven business acceleration pillars. These pillars represent the material growth opportunities that can materially affect our ability to create value over the short, medium and long term. Refer to our "Strategic focus" section on pages 44 to 51 for more information.

Better for customers

A flexible and winning estate

Efficient and effective operations

Every product, every day

A winning team

a national brand

Rest of Africa – a second engine of growth



The Group developed its strategic turnaround plan in 2014. Its objective is to restore the business to a position of long-term sustainable growth. The Group’s successful execution of its plan to date is evident in the delivery of consistent earnings growth and value creation over the last four years.

In formulating its plan, the Group acknowledged that
a sustainable recovery would need to be achieved in a
planned, considered and balanced way over a number of
years, avoiding short-term actions that might weaken
the business in the longer term.

Stabilise the business

Stage 1 of the Group’s strategic plan focused on stabilising the operations and financial position of the business, while developing a solid foundation for future growth.

Critical building blocks included the acceleration of a centralised supply chain, the development of a more efficient, “Next Generation” supermarket, and the restructure of our Boxer business into South Africa’s leading limited-range discounter.

By 2016, the Group was well positioned for the second stage of its plan – changing the growth trajectory of the Pick n Pay Group.

Change the trajectory

The second stage of its turnaround plan has seen the Group focus on reducing cost and increasing productivity across its operations, enabling it to invest more in its customer offer. The Group is also developing as a multi-channel retailer, with a focus on convenience, including smaller format stores, a strong and innovative online offer and a broad range of value-added services.

Stage 2 is organised around seven business acceleration pillars. These represent the seven material growth opportunities for the Group to create value. The pillars consider the material issues and concerns of our stakeholders, as well as the risks facing the business (refer to pages 32 to 36), and are underpinned by our commitment to always do good in the communities we serve.

The Group accelerated its efficiency efforts in 2018 in response to the increasingly challenging trading environment in South Africa, supporting a more competitive offer for customers through lower prices, better stores and a growing range of own-brand products.

Sustainable long-term growth

The progress achieved over the past five years has put the Group in a stronger position to reach Stage 3 of its plan, and it is demonstrating a number of the attributes associated with a long-term sustainable retail business. These include a mature and effective supply chain, ongoing improvements in operating efficiency, a clear blueprint for growth, innovation and the agility to respond to changing customer needs.


The Group’s plan is organised around seven business acceleration pillars. The pillars provide the senior management team with clear priorities, objectives and lines of accountability. The Group has consistently communicated its financial and operational performance against these pillars, providing stakeholders with a consistent and transparent scorecard of year-on-year progress.

Each business pillar presents an opportunity to create value and the value creation is tracked against measurable goals.

The strategic focus of the business is to:

Grow sales in line with, or ahead of the market, by providing great value, service and innovation for customers:

The focus here is on delivering a first-class fresh, convenience and grocery offer, which gives customers unbeatable prices, value and service. The business is also developing a strong multi-platform and multi-channel retail offer, including small convenience formats, standalone clothing and liquor stores, and greater innovation through financial services and a growing online business. In addition, the Group is building its Boxer business into a thriving national limited-range discounter, and is growing its footprint outside South Africa in a planned and prudent way.

Achieve high levels of operating efficiency and lower costs to enable maximum reinvestment in the customer offer:

The focus here is on completing the centralisation of the Group’s supply chain, reducing the cost and improving the accuracy and responsiveness of its distribution. The Group also aims to improve the efficiency and cost-effectiveness of its operations, including through the centralisation of administrative services and the optimisation of staff and support office structures, while minimising increases in rentals, rates, electricity, water and other charges.

Restore the underlying profit margin to a historically sustainable level:

The Group regards a sustained improvement in its underlying profit margin as a lead indicator of progress in achieving a balanced turnaround, characterised both by sustained sales growth and greater operating efficiency.


The Group’s turnaround plan has essentially been about returning the Group to its roots as a discounter and consumer champion. Over the past five years, the Group
has improved its customer offer, modernised its stores, centralised its supply chain, and firmly controlled its costs. The result has been strong profit growth, an improvement
in underlying profit margins, and sustainable value creation for all stakeholders.

The Group has, through the ongoing execution of its plans, successfully built five clear engines for long-term growth:


Pick n Pay – South Africa’s
most trusted retailer


Pick n Pay was recognised as South Africa’s most trusted retailer in 2017, as it strengthens its business and customer offer while always remaining true to strong core values of corporate governance and corporate citizenship.


Boxer – Africa’s favourite


Boxer is delivering strong market-beating turnover growth as it provides even greater value to customers across South Africa and Swaziland through its tight range, high-quality meat and produce offer, and a modern and convenient store estate.


customer services


Services are an increasing contributor to growth. The Group is using its substantial store and systems infrastructure to offer its customers innovation in value-added services, including bill payments and money transfers, and we are determined to grow into South Africa’s most affordable and inclusive banking partner.


Expansion in Africa


There is great opportunity for the Group to expand its reach outside South Africa, and we have a dedicated Rest of Africa team focused on growing our business in a measured and considered way that delivers sustainable growth in developing markets.


Force for good


We are exceptionally proud of our substantial contribution to the well-being of South African communities over more than 50 years. We are committed to building a better South Africa through a focus on more jobs, more entrepreneurs, and more support for our schools. Our business will grow hand in hand with our contribution to society.


The Group has not communicated a timeline for the completion of Stage 2. We will look for the following indicators as markers for the successful completion of Stage 2, providing a strong foundation for Stage 3 – sustainable long-term growth:

  • A track record of consistent sales and profit growth over a number of years
  • A resource-efficient business that is a positive force for good in the countries in which it trades
  • Strong customer loyalty and advocacy
  • Continued innovation in store and in our customer offer
  • An operating model that benchmarks internationally
  • A continuing growth strategy
  • An employer of choice that delivers opportunity for all
  • Collaborative and enduring relations with a strong and diverse supplier base



Strategic focus