Pick n Pay is sharpening its focus on fresh food, baby, beauty and pet products as it seeks to close the gap with rivals that have gained ground in categories where the retailer admits it has “fallen behind”.CEO Sean Summers said the retailer is repositioning key parts of its offering after years of underinvestment, with fresh food emerging as the company’s strongest growth driver during its turnaround effort.“Our fresh growth at the moment is, in fact, of all of our growth vectors in the company, currently number one,” he said.Summers said Pick n Pay had rebuilt leadership capabilities in its fresh division, including buyers and sourcing teams, after the category “had not received a lot of attention”.The renewed focus comes as competitors, including Checkers and Woolworths, continue to strengthen their positions in the adjacent categories such as beauty and pet care.Summers acknowledged Pick n Pay had lost ground in some of these segments. “Yes, we have. We’ve absolutely fallen behind in those segments, and that’s why we’re refocusing on them again,” he said, referring to the baby, beauty and pet categories.Rather than launching standalone speciality chains, Pick n Pay plans to use its existing store network to drive growth in these areas through improved ranges, merchandising and in-store presentation.“We don’t need standalone stores with additional rentals, more management, more security. People are shopping in your existing store,” Summers said.The strategy forms part of a broader turnaround under Summers, who returned to the retailer in 2023 to stabilise the business after years of market share losses and operational strain.The company also plans to resume measured store expansion after slowing openings during the restructuring process. Summers said Pick n Pay would open seven new stores in South Africa in the current financial year.We don’t need standalone stores with additional rentals, more management, more security. People are shopping in your existing stores.— CEO Sean Summers At the same time, the retailer is downsizing oversized hypermarkets as leases expire. Some of the group’s hypermarkets are as large as 15,000m², while modern trading requirements typically need about half that size, Summers said.The retailer is also intensifying its focus on private-label products, which Summers said were showing “fantastic growth” as consumers remain under pressure.Still, an analyst says the turnaround remains heavily dependent on fixing Pick n Pay’s cost structure.Anchor Capital’s Stephan Erasmus said the retailer’s latest earnings improvement relied heavily on non-core contributors such as Boxer and lower interest costs, raising questions about the quality of earnings growth.He said Pick n Pay’s labour restructuring process, under Section 189, could prove to be the most difficult phase of the turnaround.Summers defended the retailer’s decision to begin section 189 negotiations with employees, arguing that Pick n Pay’s employment costs remain materially above competitors. He cited Sunday pay rates, where Pick n Pay workers receive double pay compared with the industry norm.The retailer has pushed out its break-even target to 2029, with Summers insisting the priority is a “quality turnaround” rather than short-term fixes that could create future pressure.Pick n Pay has 1,538 stores in South Africa, including clothing, liquor, and hypermarkets. Of those, 950 are its own stores, while 588 are franchised. Over the past two years, Pick n Pay has been closing loss-making company-owned stores and converting some into its subsidiary Boxer. This is part of its ongoing turnaround strategy aimed at returning the company to profitability. Summers said the store rest concluded in the financial year to March this year. He said the company will be focusing on opening new stores. Summers said Pick n Pay was making progress on its turnover objective of “driving improved like-for-like sales growth in profitable stores and those stores with reasonable prospects of achieving profitability, while closing or converting those stores with limited opportunity for a profitable recovery.” Business Times