Shoprite plans to open another 35 stores in Africa this year

SOUTH AFRICA – Shoprite Holdings, Africa’s biggest retailer by sales, will open nearly twice as many stores on the rest of the continent this year as in 2014, CE Whitey Basson said on Tuesday.

The supermarket operator is banking on rapid growth in markets such as Nigeria and Angola where it aims to change the shopping habits of Africa’s rising middle class.

The retailer, which also operates the Checkers grocery chain and OK Furniture, reported a 10.8% rise in full-year earnings on Tuesday, buoyed by sales growth of 13.5% in stores outside its home market.

It plans to add another 35 stores this year to the 189 it has in the rest of Africa, hoping to improve on the 16% contribution that Africa ex-SA makes to its profits.

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Last year it opened 20 stores outside SA.

“It usually takes three to five years for countries to change from pavement shopping to using supermarkets,” Mr Basson said at a presentation of the company’s results.

Nigeria will get 14 new stores in the next 20 months and Shoprite is building a distribution centre there, aiming to move goods faster as imports into Nigeria can be delayed in ports for up to three months or so, Mr Basson said.

Angola is the only other market large enough to justify a distribution centre in the next five years, he said.

Hampered in SA by power outages, rising electricity costs and highly indebted consumers, Shoprite increased sales in its home market by stealing market share in its food business from rivals.

The retailer, which began as a chain of eight stores in SA in 1979 and has had Mr Basson at the helm throughout, now spans 15 countries across the continent, 13 of which posted stronger economic growth than SA last year.

Shoprite said diluted headline earnings per share totalled 772.9c in the year ended June, in line with the 773c estimate by Thomson Reuters StarMine Smart Estimates.

Headline earnings per share are the most widely watched profit gauge in SA and strip out certain one-off items.

Shoprite shares were up 1.2% by 12.45pm GMT. The shares have nearly doubled in price over the last five years as the company expanded, but are down almost 5% since the start of this year on sluggish consumer demand in SA.

The retailer said total sales rose 11.2% to R113.7bn for the year – Reuters

August 19, 2015; http://www.bdlive.co.za/business/retail/2015/08/18/shoprite-plans-to-open-another-35-stores-in-africa-this-year

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