GROCERY retailer, TM Pick ‘n Pay suffered a 21 % sales decline, prompting management to devise strategies to keep the entities on the profitable margin.
Presenting an annual report for the year 2021, Meikles Limited’s (the holding company) chairman, John Moxon, said the Covid19 pandemic had a negative impact on sales performances.
“Sales volumes declined by 21% primarily due to COVID-19 induced restrictions in trading times. In addition, some stores had to close for certain periods of time when staff tested positive.
“The decline in volumes reduced in the second half of the financial year and volumes are currently increasing on a month-on-month basis,” he said.
We are thankful for the agility of our employees, suppliers and customers in their ability to adapt and provide a safe shopping experience in the stores during a challenging period.
Despite the sales setbacks, operating profit grew to $1,1 billion from $734,1 million in the previous year.
Profit growth was achieved through tight margin control and substantial savings in operating costs, other than employee costs.
During the period under review, employee costs expressed as a percentage of revenue increased, due to statutory increases in basic salaries and the need to cushion employees through cost of living adjustments during these challenging economic times.
In addition, other payroll related costs increased such as staff uniforms, transport allowances and medical aid expenses.
The Profit after Tax was $ 632,5 million, a reduction from the previous year of $ 2,0 billion.
The strength and stability of the segment is reflected through the generation of sufficient cash flows from operating activities to fund the operations, investment in new stores, refurbishment of the existing stores and a payment of a dividend to shareholders during a period with significant COVID-19 disruptions.
“The segment invested $578,5 million in store upgrades and two new stores, Pick n Pay Aspindale and Pick n Pay Chiremba.
“In the next three years, a substantial growth in investment in this segment will be implemented,” added Moxon.