Shoprite’s half year sales grow by 7% despite dismal performance outside SA

SOUTH AFRICA – Africa’s retail giant Shoprite has reported a 7% growth in the group’s total sales to approximately R81.2bn (US$5.62b) in its half-year financial performance ending December 2019.

The growth was driven its South African supermarkets which saw sales up 9.8% for the period to R61.7bn (US$4.29b) unlike its operation in the other African countries.

“All three supermarket brands, Shoprite, Checkers and Usave, traded well in a tough market,” the group said.

Supermarkets in the rest of Africa saw sales decline 3.1% to R10.8bn (US$751.62m). Shoprite pinned this on currency devaluations in these markets.

“We have continued to experience ongoing currency devaluations and volatility in key markets in which we trade. The Angolan kwanza weakened by 40.6% against the US dollar since June 2019.”

“During the reporting period, the Angolan kwanza, Zambian kwacha and Nigerian naira depreciated 40.4%, 20.8% and 18.2% respectively against the US dollar when compared to the previous year,” the update read.

During the period the group added 66 stores to its supermarket business, bringing the total number of stores to 1, 911. Its franchise division grew by 10 stores to 470.

Shoprite’s furniture division also reported a decline of 2.7% to R3.3bn (US$229.6m). This is mainly due to the reduction of the store base to 13. Load shedding in SA and currency devaluations in the rest of Africa also impacted the division’s performance.

Sales at Shoprite’s liquor business remained strong, growing 20.5%. Shoprite opened its 500th bottle store in 2019.

Other operating segments – which include businesses OK Franchises, Computicket, MediRite Pharmacies, Transpharm and Checkers Food Services – grew sales by 4.4% to R5.4bn (US$375.81m).

During the period there was a six-week strike impacting Transpharm, a pharmaceutical wholesale business, impacting the performance of the segment. OK Franchises grew by 7.5%.

The group’s interim results for the half-year period ending on December 29, 2019, will be released on February 25, 2020.

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