Pick n Pay's Ackerman concerned that elections will bring new booze sales ban

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Pick n Pay lost about R930 million in sales during the July unrest,
Pick n Pay lost about R930 million in sales during the July unrest,
  • In its results for the half year ended 29 August 2021, Pick n Pay estimated that it lost R800 million in sales to alcohol trade restrictions.
  • Pick n Pay chairperson Gareth Ackerman asked the state to "resist the temptation" of further restrictions.
  • Despite sporadic alcohol sales bans, and the civil unrest in July, Pick n Pay saw a 40% increase in headline profit per share, and doubled its interim dividend.

Pick n Pay chairperson Gareth Ackerman has urged government to stop imposing alcohol trade restrictions, saying the bans have been "immensely damaging". 

South Africa has banned the sale of liquor sporadically since the beginning of lockdown in 2020 to curb the impact of the Covid-19 pandemic - specifically to keep hospital beds clear of alcohol-related trauma cases.

The most recent blanket ban on alcohol sales was lifted in July. Restrictions on trade were further relaxed, with the country's lockdown being adjusted to level 1 at the end of September.

In the six months to 29 August 2021, Pick n Pay estimated it lost R800 million in sales due to alcohol trade restrictions.

On Wednesday, at the group’s results presentation, Ackerman asked the state to "resist the temptation" of further restrictions.

"[It] has an immensely negative impact on jobs, on the economy, on confidence in our Covid-19 response, and of course on the performance of businesses like ours," he said.

He added that Pick n Pay was concerned that the country's state of disaster is being used by some in the government to address liquor policy issues instead of going through constitutional processes. He was also concerned about restrictions being imposed for the upcoming local government elections. 

The focus should rather be on getting the country vaccinated, he said.

The impact of the liquor sales bans on Pick n Pay, has been exacerbated by the July riots that took place in KwaZulu-Natal and Gauteng.

The grocery retailer, which also owns the Boxer supermarket brand, said the unrest resulted in it losing an estimated R930 million in sales, with 212 of its stores damaged. 

Its two biggest distribution centres in KwaZulu-Natal saw considerable damage and looted of all stock. Pick n Pay also had to close 551 additional stores as a precautionary measure, at the peak of the looting.

For the six months, Pick n Pay's turnover increased by 4% to R46 billion.

Its gross profit margin declined from 19.6% to 18.2%, and its prices increased by only 3.6%, compared to food inflation of 6.5%.

But half-year headline earnings increased by 40% to 61.28c per share.

Its Boxer division as well as Pick n Pay’s clothing business delivered strong performances. Boxer's own brand sales saw a 26% increase compared to the same period last year, while clothing sales also saw 26% growth year-on-year.

Its interim dividend almost doubled to 35.8c per share

Pick n Pay's share price gained more than 1% on Wednesday.

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