Despite the distortions in the results caused by the lockdown restrictions, we think PIK’s supermarket business is lagging its peers, and it may not have gained as much of the business diverted from the hospitality industry as some of its competitors. We believe this may be due to its store profile, as Pick n Pay only has 93 stores in the Select segment, which is a third of SHP’s footprint targeting this segment and a quarter of WHL Food’s network. The outperformance of the lower-income market Boxer chain relative to the higher-income Pick n Pay chain is perplexing, as other food retailers’ results showed a trend where higher-income chains performed better during the lockdown. We argue that a change in the franchise/corporate store mix could be positive for PIK, as it could enhance margins. The experience of Woolworths’ conversion of its franchise model in 2011 is instructive, and we think a similar strategy for PIK could improve returns to shareholders.