* Workers demand 12 percent wage hike
* Australia competition watchdog delays sale
* Shares down 1.1 percent, vs 0.5 percent decline in index (Updates with length of strike, company comment)
By Tiisetso Motsoeneng
JOHANNESBURG, Sept 23 (Reuters) - Thousands of workers at South Africa's No.2 grocery chain Pick n Pay plan to launch a four-day strike for higher wages, a union official said on Thursday.
Pick n Pay already struggles with high expenses, analysts say, and is facing difficulties with the planned sale of its underperforming Australian unit.
At least 25,000 workers, led by the South African Commercial, Catering and Allied Workers Union (SACCAWU), are threatening to strike from Friday if they do not receive a 12 percent wage hike.
"Pick n Pay expenses are already too high, so a higher settlement will be damaging," said one Johannesburg-based analyst, who declined to be identified.
"The strike will not be in their best interest either, it will magnify these tough trading conditions."
A spokesman for the union, Mduduzi Mbongwe, told a news conference the strike could be extended beyond the initial four days, depending on the outcome of talks with the company.
Pick n Pay spokesman Neil Quirk said the company had a contingency plan and stores would operate as normal.
Pick n Pay reported a flat full-year profit in April and said it expected business to remain tough. Expenses equalled about 16 percent of its full-year revenue.
South Africa, the continent's biggest economy, has been hit by a wave of strikes and strike threats, which have led to pay settlements well above the current inflation rate of 3.7 percent.
Separately, Pick n Pay said the close of its sale of its Australian unit has been pushed back until November, due to enquiries from Australia's competition watchdog.
Pick n Pay said in July it would sell its underperforming Australian supermarket business, Franklins, to unlisted Metcash Trading for A$215 million ($205 million).
But it said on Thursday it had received requests for further information on competition issues from the Australian Competition and Consumer Commission.
Pick n Pay said it would provide further information to the competition commission by Oct. 15, and expects a decision by November 11.
Shares of Pick n Pay fell 1.2 percent to 43.45 rand, compared with a 0.09 percent decline in Johannesburg's Top-40 index. (Editing by David Dolan and Jon Loades-Carter)