Shoprite signals exit from Uganda, Madagascar to focus on profitable home market

SOUTH AFRICA – Africa’s largest retailer, Shoprite is continuing to review its operations outside its home market South Africa, with the retailer classifying its operations in Madagascar and Uganda as discontinued.

This follows the transfer of ownership of its Nigerian operations to Ketron Investment Limited, a company owned by a group of institutional investors led by property firm owner, Persianas Investment Limited in June this year.

The company which has been trading in the rest of Africa since 1990, also shut doors of its last store in Kenya, earlier in the year.

Shoprite’s exit from the fore mentioned markets has been propelled by currency devaluations, supply issues and low consumer spending, with the latest announcement concerning 10 stores in Madagascar, and 5 in Uganda.

In its trading update for the 53 weeks ended 4th July 2021, the group’s total sale of merchandise from continuing operations increased by 8.1% to approximately R168 billion (US$11 billion).

Excluding the impact of the closure of the RSA liquor shop business due to COVID-19 lockdown regulations, it increased total sale of merchandise from continuing operations by 8.3%.

The retailer’s core business in South Africa (RSA), contributing 79.7% to sales from continuing operations, achieved sales growth of 9.3%. Like-for-like sales grew 7.3%.

Supermarkets RSA, excluding LiquorShop, achieved sales growth of 9.7%, with like-for-like sales for the year measured at 7.5%.

Checkers and Checkers Hyper reported sales growth of 10.9%. This is notwithstanding the high base reported for the second half period last year. While Shoprite and Usave reported sales growth of 8.8%.

The group’s LiquorShop business’ sales increased by 4.4% despite first-half sales declining by 21.8%, offset by second-half sales gain of 53.6%.

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“Growth was significantly impacted by the mandated liquor trade closures forming part of Covid-19 lockdown regulations. In total, our LiquorShop business was closed for 144 days over the 53 weeks – 79 days during the first half and 65 days during the second half,” it said.

Meanwhile its Non-RSA units continued to operate in regions challenged by macroeconomic and consumer affordability constraints, exacerbated by the impact of COVID-19 restrictions and regulations.

Notwithstanding these factors, constant currency sales from continuing operations increased by 6.8%.

According to the trading update, Shoprite opened a net of five stores of its non-RSA operations.

The group’s other operating segments, comprising OK Franchise, Transpharm, MediRite Pharmacies, Checkers Food Services (CFS) and Computicket, reported sales growth of 10.0%.

Its OK Franchise division achieved sales growth of 8.2% and added a net of 36 stores over the reporting period.

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