SOUTH AFRICA – Shoprite Holdings (JSE: SHP), the South African retail giant, has reported a robust performance in its 2024 earnings call, with revenue outpaced market expectations, doubling the market’s performance and marking its fifth consecutive year of outperforming competitors.
Shoprite’s gross profit surged to nearly ZAR58 billion, a rise of 11.7%, with CEO Pieter Engelbrecht highlighting significant growth and market share gains.
The owner of upmarket grocery chain Checkers and discount brands saw a 12% sales growth, a 12.1% increase in total expenses, and a 12.4% rise in trading profit to R13.4bn.
Shoprite’s group sales from continuing operations rose by 12% to R240.7bn, boosted by both its upmarket and discount grocery brands. Its core South African supermarkets business increased sales by 12.3% to R195bn.
The group operates in 10 countries outside South Africa, including the Democratic Republic of Congo and Angola. The company opened 292 new stores and plans to open 1,000 more in South Africa over the next five years.
During the earnings call, the retailer said it remains committed to affordability, offering products at ZAR1 and instant savings at checkout.
“We opened 292 new stores. We have launched first the extra savings subscription model. That was a defensive play for new entrants in the market, and we see very good traction in that, followed by more digital investment on the Checkers Hyper proposition, new 24 name Shoprite Group is company of the year,” Engelbrecht said.
The retailer is investing in technology and digital capabilities, including same-day delivery services and smarter pricing tools.
“Hence, the building of this data constantly for the last 7 years, 8 years to get a better understanding and then be able to deploy new technologies like artificial intelligence, et cetera, into our tech investments to give not us only an ROI, but a better experience to the consumer, both in-store and digital,” Engelbrecht underlined.
“We have upgraded the stores, don’t underestimate the in-store experience when you want to go digital omnichannel. It can’t be only one.”
Shoprite said that it was in advanced discussions to purchase the remaining 50% stake in its last-mile logistics provider Pingo.
Pingo supports its grocery delivery business Checkers Sixty60, which has benefited from increased online demand since the pandemic.
Out of food industry space, the retailer said it agreed to sell its furniture business including the OK Furniture and House & Home brands to Pepkor, for about 4% of Pepkor’s R80.49bn market capitalisation, in order to focus on its core grocery business.
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