Retail Reset: How Pick n Pay’s portfolio pruning could redefine SA’s Retail landscape

Key Takeaways

• Pick n Pay is cutting underperforming stores and doubling down on profitable, high-efficiency formats like Boxer.
• The retail giant is reshaping its property strategy to focus on fewer, higher-performing locations.
• This signals a larger shift in SA retail from bloated footprints to lean, strategic operations.

A Retail Giant’s Strategic Pivot

Pick n Pay’s bold decision to streamline its national store footprint is more than just a cost-saving measure—it’s a high-stakes pivot that could redefine the future of retail in South Africa. With over 100 stores earmarked for closure or conversion and more than 30 already shuttered, the retailer is shedding dead weight to build a faster, leaner, and more responsive business model.

Under the renewed leadership of Sean Summers, and following the successful listing of its discount division Boxer, Pick n Pay is aligning itself with what works in today’s challenging economic landscape: efficiency, affordability, and agility.

Efficiency, Reinvestment, and Boxer’s Rise

According to John Jack, CEO of Galetti Corporate Real Estate, the move is not about downsizing for the sake of survival—it’s a strategic reset.

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“This is about cutting back to the core and building a leaner, more profitable machine that can actually respond to where the market is now.”

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Boxer, Pick n Pay’s discount format, is leading the charge. It raised R8.5 billion through its listing and remains majority-owned (65.6%) by Pick n Pay. With a stripped-down, high-efficiency model tailored to the price-sensitive South African consumer, Boxer is expanding smartly—and setting the tone for the broader market.

The new flagship store at Westown Square in KZN is part of the “Super Seven” strategy, a signal that the retailer isn’t shrinking its ambition—just its inefficiencies.

What Doesn’t Work: Bloated Footprints and Misaligned Assets

Pick n Pay’s realignment involves a full audit of its store portfolio, including:

• Trading densities (sales per sqm vs. costs)
• Lease viability (escalation clauses, termination penalties, landlord relationships)
• Overlapping trade areas cannibalising stronger stores
• Demographic mismatch (where the customer base no longer fits the brand)
• Repurposing opportunities (conversion to Boxer, franchise handovers, or community hubs)

Poorly performing sites with limited upside are being cut. High-opportunity areas are being reinvested in. Everything in between is being converted, franchised, or repositioned.

Double Down: Smarter Stores, Not More Stores

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“Fewer stores, higher performance,” Jack says. “That’s the new mantra.”

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The benefits of this rationalised approach are clear:

• Lower overheads and better use of capital
• Simplified logistics and tighter supply chains
• More focused marketing and merchandising
• Room to invest in digital transformation and future-ready store formats

And it’s not just about retail—it’s also a property play.

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“Some sites being vacated or repositioned may become logistics hubs, community centres, or development opportunities. The property component is just as strategic as the retail one,” adds Jack.

What This Means for SA’s Retail Property Sector

Retail landlords and developers should take notice. The Pick n Pay shift reflects a global trend seen in the US and Europe, where big-box retailers have reduced footprints in favour of agility and efficiency.

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“This isn’t about having the most stores—it’s about having the right stores,” says Jack.

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For landlords, this means:

• Reimagining underperforming anchor tenant space
• Adapting to modular, flexible leasing formats
• Thinking beyond traditional retail to mixed-use, health, logistics, or community service models

Malls and retail centres will need to work harder to attract footfall and provide experiences that extend beyond shopping.

A Blueprint for Smarter Retail

If Pick n Pay executes this reset well, it could become the benchmark for other retailers grappling with bloated portfolios and outdated models.

This is more than a survival strategy—it’s a calculated evolution. A clear-eyed assessment of what no longer serves the business, paired with targeted reinvestment in what does.

“If managed properly, this becomes the blueprint for how South African retailers clean house and rebuild smart,” concludes Jack.

The message to the industry? Adapt or be left behind

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