- Pepkor, the owner of South African retail chains PEP and Ackermans, saw its shares drop more than 10% on Tuesday after it reported that its retail margins came under strain as it discounted to clear unwanted summer stock.
- The company also warned that its customers are increasingly prioritising essentials such as transport over new clothes, which has led to a decline in sales and foot traffic at its stores.
- Pepkor’s revenue for the first half of its financial year, which ended in March, grew by only 1.1% compared to the same period last year, while its operating profit declined by 2.9%.
- The company cited several factors for the weak performance, including the impact of the pandemic on consumer spending, supply chain disruptions, and increased competition from online retailers.
- Pepkor has been implementing various cost-saving measures, including store closures and staff reductions, in an effort to improve its financial performance and adapt to changing consumer behavior.
- The company’s management remains optimistic about its prospects, citing the success of its online sales channel and its strong balance sheet. However, analysts have expressed concern about the company’s ability to compete in a rapidly changing retail landscape.
