Wednesday, October 21, 2009

Pick 'n Pay warns consumers: It's going to be tough

SHOOT: How do they know? Because no name brands are selling like hot cakes.

It was also looking at expanding its footprint in Africa with stores already planned for Lesotho and Zambia in the next few months.

Badminton said Pick n Pay has also identified Angola and Mozambique as future investment areas.
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"It's going to be tough. But there will be some opportunities. I think our LSM 8 to 10 customers, who usually go overseas for holidays, will stay this year," said Badminton.

He said the tough conditions were reflected in the 26% growth in sales of Pick n Pay's own "value for money" label brands.

The group increased its turnover by 12.3% to R26.6bn during the six months to end-August, compared with same period last year.

Headline earnings per share (100c) were 11.1% higher. Badminton said he would be happy if the group could report 11% growth in full year earnings.

He noted that a number of factors had a significant impact on the earnings growth.

"Importantly, electricity costs soared and look set to escalate further. These costs grew markedly from 3.1% of expenses for the six months ended August 08 to 3.8% of costs for this period. The impact of Eskom's increases is expected to result in a 40% increase in our electricity bill for the full year, with more to come in subsequent years.

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