Pick n Pay’s widening losses are not a unique problem, say analysts, with value legend John Biccard now a big holder of the stock.
Saying Pick n Pay is in a bad place is not revolutionary,” Richard Cheesman, fund manager at Urquhart Partners, tells Currency. But for investors, it still stings.
Take this week’s profit warning, in which the retailer warned investors to brace for a full-year headline loss that will be at least 20% worse than a year ago. It was enough of a surprise to slice off a 10th of Pick n Pay’s market cap.
Disturbingly, Pick n Pay Clothing, usually a high performer for the brand, is struggling: like-for-like sales shrank 6.8% in the second half of the 48-week period monitored in the update.
The big question for investors is whether Pick n Pay – under the dogged turnaround efforts of Sean Summers since 2023 – is failing to flay the demons of its own making, or whether the entire retail sector is in far worse shape than anyone thought.
“This is a two-pot hangover,” says Cheesman, referring to the windfall that retailers enjoyed in 2024 when savers were first allowed to withdraw a chunk of money from their pension funds.
Two-pot hangover
“Now it’s out of the base you’re seeing the impact. I don’t think Pick n Pay blew up their clothing business in the last six months – and I think you’ve seen the same kind of numbers with Mr Price and TFG,” he says.
It’s clear that much of the damage took place in the second half of the group’s financial year, with Black Friday – unaided by the two-post boost of 2024 – clearly not delivering the goods. Until the end of August, for example, the growth in Pick n Pay’s clothing business had been 7.5% year on year.
“Across the South African and international retail landscapes, clothing retail broadly is under pressure,” says Umthombo Wealth’s Alexander Duys.
But, he adds, Pick n Pay’s trading update is “a disappointing outcome for investors and a reminder of the difficult task management faces in driving a turnaround amid weak economic conditions”.
Intriguingly, value investing guru John Biccard has taken a large punt on Pick n Pay; the retailer makes up a roughly 5% share in his value fund, and he believes it’s not a Pick n Pay problem but “a market problem”.
“If you’re the weakest player in retail, and there’s a slowdown, you’re going to feel it the most,” the Ninety One portfolio manager tells Currency.
Though the slowdown in growth for Pick n Pay clothing is still concerning, as “they’ve been growing so much quicker than everyone else for years”, Biccard points to the fact that Truworths, Foschini and other clothing retailers are equally taking strain from the sluggish economy.
Overall sales have decreased 3.6% for Truworths in the half-year ended December 2025, driven by a 5.8% fall in cash sales. Its headline earnings per share are down 8% for the full year.
Foschini barely grew, with like-for-like sales rising only 1.2% in the third quarter of its 2026 financial year.
The Shein factor
And then there’s the relentless onslaught from online fast-fashion stores Shein and Temu. “Their rapid rise has reshaped competitive dynamics in the apparel sector, especially in the lower-price fashion segment where local physical retailers like Pick n Pay compete,” says Duys.
According to a 2025 report by the Localisation Support Fund, Shein and Temu collectively achieved R7.3bn in sales in 2024, accounting for 3.6% of the South African retail market and 37% of total online retail sales.
“This rapid growth has come at a notable cost to the local economy,” the fund says, with an estimated R960m lost in local manufacturing sales.
Even Shoprite, “the leader in the sector [which] always does the best, had a significant slowdown over the past two months”, notes Biccard.
Still worth a punt?
Luckily for Pick n Pay, Boxer, in which it maintains a 65.6% stake, is still doing well. The discount retailer grew sales 11.9% in total for the 48 weeks to February 1, and 3.9% on a like-for-like basis.
The difference in performance means that Pick n Pay’s 65.6% stake in Boxer is worth R21bn, while its own market cap is just R16bn.
“When the market value of a business is -R5bn, it basically means that, in perpetuity, Pick n Pay is going to lose money,” says Biccard.
Says Cheesman: “The market is valuing the core Pick n Pay business at less than zero.”
So, should investors throw in the towel? On the contrary, argues Biccard.
“It’s terrible right now, but that’s actually when you buy,” he says. “You have to say: ‘Is there a chance things will get better?’”
Both Cheesman and Biccard are relatively optimistic of a slight upturn in growth, from 1% closer to 2%. Petrol prices are going down, inflation is settling and interest rate cuts will help with consumer debt.
“I lean slightly optimistic here. Pick n Pay is finally taking the tough steps, closing underperforming stores and tackling its cost base,” Cheesman says.
In any case, Pick n Pay has at least two years of cash runway to turn things around, Biccard notes. “I have no doubt that it will go down some more, but then we will just buy some more.”
Caption: Kath McClay, President and CEO of Walmart International, Image Supplied.
South Africa’s retail landscape is taking shape as Massmart, the owner of Game, Makro and Builders considers closing about 20 Game stores across Gauteng, the Western Cape and KwaZulu-Natal.
Game currently operates about 122 outlets locally, part of a wider network of roughly 150 stores across 12 African countries.
In a statement shared with media, Massmart noted: “The potentially affected stores represent a small part of our total Game store portfolio, and we continue to invest in the future growth of Game, including through the rollout of our pantry merchandise proposition, which is enjoying high demand from Game customers.”
The group added that there are no plans in place to close the Game business.
That assurance comes despite mounting pressure on traditional big-box retailers, as analysts tracking the sector point to years of economic strain, rising competition and the rapid growth of online shopping as factors reshaping consumer habits.
Electronics and appliances, long staples of Game’s offering, rank among the most popular categories for e-commerce purchases.
Momentum behind the strategy became more visible late in 2025 when Walmart opened its first branded South African stores at Clearwater Mall and Fourways Mall, both converted from former Game sites. Another location is scheduled for launch in Boksburg during the first quarter of 2026.
Walmart, which first acquired a 51% stake in Massmart in 2011, moved to take full control in late 2022.
Kath McLay, who is the president and CEO of Walmart International, highlighted the company’s local ambitions.
“By partnering with South African suppliers and entrepreneurs, Walmart brings its signature Every Day Low Prices and global standards to the market.”
Massmart chief executive Miles Van Rensburg echoed that focus on affordability, noting: “Every rand matters when it comes to price. This balance of quality and everyday low prices enables us to build customer trust.”
Founded in 1962 by brothers Sam Walton and James “Bud” Walton in Rogers, Arkansas, Walmart has grown from a small discount store into a global retail powerhouse. It now operates 10,750 stores and clubs in 19 countries, alongside eCommerce platforms, and employs approximately 2.1 million people worldwide.
Johannesburg – Walmart’s push into South Africa is picking up speed, with new stores opening and more on the way, while Game’s network across the country continues to get smaller. This shift comes as Massmart, the local group fully owned by Walmart, looks at closing around 20 Game outlets in key provinces to make room for Walmart-branded shops. The changes highlight how the US retail giant is stepping up its game to offer better prices and quality goods to local shoppers facing tough economic times.
Walmart’s Growing Presence in South Africa
Walmart first dipped its toes into the South African market back in 2011 by buying a 51% stake in Massmart. By late 2022, it had taken full control, setting the stage for bigger moves. The company announced in September 2025 that it would open its first branded stores before the end of that year, marking a bold step to bring its well-known name directly to local consumers.
This expansion goes beyond just rebranding. Walmart aims to stock a wide mix of items, from fresh groceries and household basics to clothing and tech gadgets. Shoppers can expect exclusive private label products and unique items from around the world, all at competitive prices. The strategy focuses on quality and affordability, which Walmart sees as key to winning over South Africans hit by rising costs and weak growth.
Game’s Shrinking Network Amid Challenges
Game, a long-time favourite for electronics, appliances, and general goods, has been under strain for more than a decade. Fierce competition from other retailers and a sluggish economy have squeezed its profits and forced tough choices. Since late 2022, at least 13 Game stores have shut their doors, with some sites quickly turned into other formats or left empty.
Now, Massmart is reviewing about 20 more Game locations in Gauteng, the Western Cape, and KwaZulu-Natal. These could close soon, with plans to rebuild many as new Walmart outlets. This follows a pattern where struggling Game spots are repurposed to fit Walmart’s vision. For example, the Game store at East Point Shopping Centre in Boksburg closed in July 2025, paving the way for potential changes.
These closures are not taken lightly. Massmart has promised to talk with affected workers about options like moving to new roles or other support. The moves aim to streamline operations and focus on stronger brands, but they also reflect the harsh realities of a retail sector where only the most adaptable survive.
Key Store Openings and Rollout Plans
The rollout kicked off in November 2025 with Walmart’s first two stores in South Africa. One opened at Clearwater Mall in Roodepoort, and the other at Fourways Mall in Johannesburg. Both replaced former Game sites, allowing Walmart to hit the ground running without starting from scratch.
Building on that success, a third store is set to open in Boksburg on the East Rand by the end of February 2026. This location, likely at the old Game spot in East Point Shopping Centre, will bring Walmart’s affordable range closer to more communities. Company leaders have hinted at speeding up growth beyond Gauteng in 2026, with sites in other provinces under consideration.
Massmart plans to share more about its long-term strategy in the second quarter of 2026. This could include details on new builds, not just conversions, and how Walmart will blend with existing chains like Makro and Builders. The approach shows Walmart’s commitment to adapting to local needs while using its global muscle to offer better deals.
Impact on the Local Retail Scene
South Africa’s retail market, worth around R1.3 trillion, is heating up with Walmart’s arrival. It puts the US giant in direct rivalry with home-grown leaders like Shoprite, Woolworths, and Pick n Pay. These chains have long dominated groceries and general merchandise, but Walmart’s focus on low prices and wide variety could shake things up.
For shoppers, this means more choices and potentially lower costs on everyday items. Walmart’s entry follows a growth summit held in Johannesburg in April 2025, where the company connected with local suppliers to boost opportunities. This not only helps build a stronger supply chain but also supports jobs and small businesses in the area.
However, the changes raise questions about Game’s future. With roughly 100 stores left, Massmart might convert more to Walmart or shift them to mini-Makro formats, as seen in some past trials. Analysts see this as a reset for Walmart in Africa, sticking with South Africa despite pulling back from other low-growth spots worldwide.
Looking Ahead: Opportunities and Challenges
As Walmart ramps up, it faces hurdles like high unemployment, power outages, and supply chain snags that plague the local economy. Yet, with a population hungry for value, the timing could be right. The company’s 2.1 million global workforce and nearly R13 trillion in yearly revenue give it the tools to tackle these issues.
For Game employees and loyal customers, the transition brings uncertainty but also hope for fresh starts. Massmart stresses that any changes will involve talks to minimise job losses, possibly through transfers or training for new positions.
This evolving story underscores a bigger trend in South African retail: adaptation is key to survival. As Walmart grows and Game shrinks, the landscape is set for exciting shifts that could benefit consumers in the long run. Keep an eye out for updates as more stores open and strategies unfold.
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JOHANNESBURG – Game’s footprint in South Africa is shrinking, while Walmart’s presence is rapidly expanding.
Massmart is considering shutting down 20 Game stores across Gauteng, the Western Cape, and KwaZulu-Natal. The plan is to redevelop those sites into new Walmart outlets.
The game has been under pressure for over a decade, squeezed by rising competition and weak economics.
Walmart, which first bought a 51% stake in Massmart in 2011, took full control of the group in late 2022.
Its South African ambitions became clearer in November 2025, when Walmart opened its first branded stores at Clearwater Mall in Roodepoort and Fourways Mall
Both outlets replaced Game, signalling how Massmart planned to repurpose struggling Game sites as part of a larger rollout.
Massmart says further details of its long South African strategy will be announced in the second quarter of 2026.
South Africa’s unemployment rate has dropped by 0.5 percentage points in the final quarter of 2025, to 31.4% from 31.9% in the previous quarter.
However, the country has added 2.6 million people to the number of unemployed over the past ten years, with shocking levels of youth unemployment persisting.
According to Stats SA, this marks an increase of 44,000 people employed in the country, taking the total to 17.1 million.
There was also a decrease of 172,000 unemployed people—now down to 7.8 million—with the labour force dropping by 128,000 people on a net basis.
The changes in employment and unemployment led to the official unemployment rate decreasing, while the combined rate—the new proxy for the previous “expanded unemployment rate”—remains at 42.1% (down from 42.4% previously).
The combined rate reflects the number of unemployed persons, as well as those who are available to work but are discouraged or not seeking employment.
Stats SA noted that this is a different metric from the previous expanded unemployment rate, but it tracks very closely to that rate and will be used going forward.
Over the fourth quarter, discouraged job-seekers increased by 233,000 to 3.7 million.
Other available job-seekers decreased by 110,000 to 855,000, and unavailable job-seekers decreased by 41,000 to 42,000, resulting in a total net increase of 82,000 to 4.6 million in the potential labour force population.
Others outside the labour force increased by 165,000 to 12.5 million. Outside the labour force, which is the total of the potential labour force and other outside the labour force, increased by 248,000 to 17.1 million in Q4 of 2025.
In addition to the unemployment rate, other measures of labour underutilisation were measured.
The combined rate of unemployment and time-related underemployment decreased by 0.6 of a percentage point to 34.3%.
The composite measure of labour underutilisation—which combines time-related underemployment, unemployment and potential labour force as a proportion of the extended labour force—was 44.5% in the fourth quarter of 2025 (down from 44.9% in the previous quarter).
These labour underutilisation measures highlight people in different situations and with different degrees of attachment to the labour market.
Overall, South Africa’s labour market shows improvements across all measures; however, the rates are still extremely high and reflect the persistent jobs crisis in the country.
Between Q4:2015 and Q4:2025, the number of unemployed persons in South Africa increased from 5.2 million to 7.8 million, with the proportion of those in long-term unemployment increasing from 66.9% to 79.7% over the same period.
Youth unemployment also remains extremely high, with unemployment rates of those in the working age 25-34 sitting at 44.3%.
Approximately 3.5 million out of 10.3 million (or 34.0%) young people aged 15-24 years are also not in employment, education or training (NEET).
Unemployed job seekers line a street waiting for casual employment. File photo (REUTERS/Nic Bothma)
A busy local data calendar this week will ground South Africa’s economic ambitions in reality after heady reform talks buoyed sentiment following President Cyril Ramaphosa’s state of the nation address on Thursday night.
The president’s speech reiterated that job creation remains a priority for government, one which the state’s Operation Vulindlela aims to tackle by removing structural barriers to investment, such as power cuts, data costs and logistics bottlenecks.
On Tuesday, Stats SA will release the results of its quarterly labour force survey for the last three months of 2025, revealing the movement of the official unemployment rate over the quarter.
Structural unemployment continues to plague South Africa’s economy, with about a third of the country unable to find jobs.
The official rate was 31.9% in Q3 — five times higher than the average of South Africa’s G20 peers. While the Q4 reading is unlikely to be materially different, improving business sentiment offers some cause for optimism.
“While labour market conditions remain structurally weak, some economic growth momentum and an uptick in business confidence in Q4 could have helped with job growth,” said Bureau of Economic Research (BER) chief economist Lisette Ijssel de Schepper.
Investec economist Lara Hodes said she expects unemployment to have remained largely unchanged, potentially easing marginally to 31.7%.
Later in the week, Stats SA’s retail sales figures for the final month of 2025 will offer fresh insights into consumer spending and the demand side of the economy.
The BER’s latest retail survey pointed to increased confidence in the fourth quarter, with the metric climbing to 43% from 32% in Q3. The improvement was attributed to “more favourable trading conditions, buoyed by improved sales volumes and profitability in the sector”.
“Retail sales have been on a strong run and are set to cap off a solid year, reinforcing the view that household demand remained resilient despite still-tight financial conditions,” said Ijssel de Schepper.
According to Hodes, sales in the sector are expected to have climbed by about 3.2% year-on-year in December after a 3.5% uptick in the previous month.
On Wednesday, Stats SA will release its first consumer price index (CPI) for 2026, with January’s reading expected to have eased slightly on an annual basis thanks to a drop in fuel and food prices.
After contributing positively to inflation through Q4, fuel prices flipped back into deflationary territory in January, with the petrol price down 66c/l.
International food prices also fell by 2.1% month-on-month in January, with further downward pressure on domestic prices coming from a bumper maize harvest.
From 3.6% in December, Hodes forecast CPI at 3.5% year-on-year in January, while Ijssel de Schepper predicted a 3.4% rate.
Last, Stats SA will also release motor trade sales for December, providing an additional read on “big ticket” consumer spending at the end of 2025.
“These releases will help further refine our high-frequency GDP tracker and firm up views on the growth momentum heading into 2026,” said Ijssel de Schepper. – Business Day
