NATIONAL NEWS - Pick n Pay is cutting 10% of its staff, eliminating approximately 3,500 jobs, the South African grocer said on Monday, as the country grapples with its first recession in eight years.

Most of South Africa's retailers have flagged lower or stagnant profits as consumer confidence and business sentiment plumb multi-year lows amid political turmoil.

Pick n Pay, which employs around 35,000 people, said the cost of the retrenchments will weigh on its profits in the six months to end-August.

"The voluntary severance programme is one of several steps we have taken to make our business more competitive in what is a tough trading environment. For reasons of timing, it will have a material impact on our result," Chief Executive Richard Brasher said.

Pick n Pay expects its headline earnings per share for the half-year to fall by more than 20%, the company said. But payroll savings from the second half of the year will neutralise the effect of the retrenchment costs on its full-year results, Pick n Pay said.

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