Pick n Pay is planning to reduce the size of some existing stores as it seeks to lower operating costs and improve the performance of its supermarket business.
The retailer intends to use lease renewals to negotiate smaller store footprints and repurpose excess space, reassessing locations that are too large for the sales they generate.
Chief executive Sean Summers said some stores were still too big for their trading requirements.
“There are a lot of stores that are still too big and not fit for purpose,” Summers said during the retailer’s interim results presentation.
The Kenilworth Centre supermarket in Cape Town, which occupies approximately 6,000 square metres, is one example. Summers said the retailer could remove between 2,500 and 2,800 square metres.
The Brackenfell hypermarket is also being reconsidered. It occupies approximately 14,000 square metres, which Summers said was too much space for the sales it could generate.
Smaller stores to reduce operating costs
The changes form part of Pick n Pay’s turnaround strategy, which includes closing underperforming outlets and improving the efficiency of its remaining stores.
Large supermarkets carry substantial costs, including rent, electricity, maintenance and staffing. When sales do not justify a store’s size, these expenses can put pressure on profitability.
Reducing floor space could allow the retailer to retain important locations while lowering the costs of operating oversized premises.
Summers said the group is engaging with landlords about resizing stores as leases come up for renewal.
At Faerie Glen in Pretoria East, a redevelopment plan will provide for a smaller hypermarket of approximately 6,500 square metres. The remaining space is intended for other businesses, including a Woolworths Food store.
Online shopping changes retail demands
The move comes as Pick n Pay expands its digital sales operations. Pick n Pay Online turnover increased by 35.4% in the first half of the 2026/27 financial year.
As more customers use digital platforms, retailers face decisions about how much physical space they need and how stores should be configured.
Pick n Pay’s interim results for the 26 weeks ended 30 August 2026 showed group turnover of R60.5 billion, up 2.4% year on year. Group trading profit increased by 58.1% to R490 million, while the headline loss narrowed by 31.9% to R299 million.
However, the Pick n Pay segment recorded a trading loss of R516 million, although this was 16.9% lower than the previous year. Normalised occupancy costs declined by 2.6%.
The store-reconfiguration strategy forms part of Pick n Pay’s target to return its core supermarket business to trading profitability after lease interest by the 2029 financial year.
