Pick n Pay (PIK): What’s driving the gross margin uplift

A key feature of PIK’s 1H20 results was the increase in GP margin, which was an extraordinary performance considering the challenging trading conditions. We consider whether the GP margins were achieved through price increases, but find no firm evidence of this. While improved supply chain performance may have contributed to the GP uplift, there were no major strategic changes implemented in this system recently. This suggests that a key driver of the GP margin improvement may have been a significant increase in Boxer’s GPMs.