Price hikes to hit South Africa in the coming months, Pep’s owner says

Pepkor, the owner of retail brands such as Pep and Ackermans, has reported a number of risks in the coming months that could impact consumer finances.

Presenting half-yearly financial results on Friday (May 27), the group noted that its operating environment remains challenging as unemployment levels and the cost of living continue to rise.

“The extension of the monthly R350 Covid-19 Social Relief of Distress (SRD) grant in March 2023, as announced in the president’s recent State of the Nation (SONA) address, will provide much-needed relief to many southern African consumers. who needs to survive on a limited budget. “

On a positive note, the increased momentum in events and sectors such as tourism is encouraging and should ease some of the pressures consumers face, he said.

“Higher levels of price inflation are expected for the upcoming summer season starting August 2022. While challenging, this operating environment motivates operations teams to develop innovative new ways to ensure that products remain affordable for consumers, thereby redefining and consolidating the group’s position in the South African discount and value sectors. “

The group added that the disruption and uncertainty in the supply chain continued. “The group’s merchandise teams have done exceptionally well to mitigate the impact of outages on merchandise inflows and in-store availability. While uncertainties in the global supply chain persist, shipping costs appear to have stabilized and may be on a downward trend. “

“A strong trade is expected for the second half of the year, supported by the lowest base in the comparable period, which has suffered from civil unrest.”

The group said it was still on track to open another 300 stores in the financial year 2022. Other key financial results show:

  • 3.3% revenue growth to R42 billion;
  • 189 basis points market share expansion across product categories;
  • Operating profit up 19.1%.[2] to R5.7 billion;
  • 28.3% increase in earnings per main share to 91.5 cents;
  • R4.1 billion in cash generated from operations.

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