Pick n Pay and Takealot taking the fight to Checkers Sixty60
Pick n Pay and Shoprite’s battle for customers looks poised to intensify as the South African grocery giants rapidly expand their on-demand delivery services.
Pick n Pay published its interim results for the 26 weeks ending 28 August 2022 on Tuesday, showing its online sales surged during the first six months of its current financial year.
It hopes to build on this growth with the recent addition of grocery deliveries on Takealot’s Mr D Food app.
The retailer’s reported group turnover increased 11.5% from the same period last year, hitting R51.3 billion. Its gross profit margin also increased from 18.2% to 19.4%.
Pick n Pay shareholders have reaped the benefits, with headline earnings per share jumping from 61.97 cents to 97.73 cents, while the retailer also declared an interim dividend of 44.85 cents, up from 35.80 cents of the 26 weeks ended 29 August 2021.
Pick n Pay said it achieved this positive performance during its first trading period under the Ekuseni strategic plan, which it launched on 17 May 2022.
One of the plan’s key elements is building a “market-leading” online business by offering grocery delivery services on Takealot’s Mr D app, while expanding Pick n Pay’s existing asap! app and scheduled services.
Even without support for grocery deliveries on Mr D, the retailer recorded an online sales growth of 82%.
Pick n Pay and Mr D announced they started testing on-demand deliveries through the Takealot-owned delivery platform in early October 2022.
“This new dedicated grocery shopping experience with Pick n Pay through the Mr D app allows customers to shop over 10,000 food and grocery products — at the same price as in-store — for delivery in an hour,” explained Mr D CEO Alexander Wörz.
“Customers place the order on the Mr D app, Pick n Pay does the picking in its stores, and Mr D’s delivery partners then collect and deliver the order to the customer,” Wörz stated.
Pick n Pay said it will expand the service to 300 stores across the country by the end of the year after launching it in specific Johannesburg and Cape Town neighbourhoods.
Eventually, it will extend across all areas Mr D currently covers, as well as new territory.
MyBroadband recently compared in-store prices and those charged on the app and found the Pick n Pay groceries on Mr D could sometimes be cheaper.
Playing catch-up with Sixty60
The move is part of Pick n Pay’s plan to replicate the huge success of rival Shoprite’s Checkers Sixty60 delivery platform, launched in November 2019.
Shoprite reported a 250% surge in online orders on the app for the 26 weeks ending January 2022, at which point the app already had over 2 million downloads.
The company’s most recent annual results said its growth trajectory has continued and that Checkers customers could now get on-demand deliveries from 300 stores, an increase from 233 in the previous year.
Shoprite has also stated the platform’s immense success has generated over 4,000 jobs.
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