JOHANNESBURG - South African grocer Pick n Pay has pushed back its target to break even ​in trading profit at its core Pick n Pay business to fiscal 2029 from 2028, highlighting the scale ​of its ​turnaround task and pressure from a stubbornly high cost base.

Investors focused on the delay, sending shares down 7.56% by 0915 GMT, despite an improvement in group ⁠profit.

Core Pick n Pay's trading loss after lease interest widened to 2 billion rand ($123 million) in the 52 weeks to March 1, from a loss of 1.7 billion rand in the prior 53-week period.

CEO Sean Summers said reaching break-even depends on delivering all turnaround ​measures, including cutting ‌elevated labour costs.

The retailer, ⁠battling to regain ⁠market share from Shoprite , is closing stores, cutting costs and upgrading its product offer as part ​of a multi-year overhaul.

Summers said labour costs remain a major ‌challenge, with the group this month starting consultations on ⁠changes to its store labour model.

"It's not our intention for anybody to lose jobs," Summers said. "Without this recalibration, we cannot solve the group's cost base or return the business to profitability in a thin-margin industry."

TURNAROUND GAINING TRACTION

Despite the wider loss, Pick n Pay said its core business is stronger, pointing to like-for-like sales growth of 3.9% in company-owned stores and a 0.4 percentage point improvement in gross profit margin.

It said better customer service, improved product availability and a wider range - particularly in fresh categories - have helped attract more shoppers.

Group ‌profit before tax and capital items rose to 360 million rand ⁠from a loss of 237 million rand, helped by ​lower interest costs and strong performance at discount chain Boxer . Headline loss per share narrowed 14.6% to 52.58 cents.

Group turnover edged up 1% to 120 billion rand. Boxer's sales rose 9.6%, ​while Pick ‌n Pay brand sales fell 3.7% due to store closures and ⁠conversions.

($1 = 16.3281 rand)