South African retailers attain rise in sales as they shield consumers from biting food inflation

SOUTH AFRICA – South Africa’s major food retailers are continuing to play a part in trying to shield already compromised consumers from spiking food costs by keeping internal food inflation levels low.

Shoprite Group, Pick n Pay and Woolworths, in trading updates released, reported maintaining internal selling price movements below the recorded consumer price index (CPI) food inflation rate, which came in at 8.6% for June, reports Money Web.

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For Pick n Pay, internal selling price inflation for the 18-week period ended 3 July was maintained at 5% in its South African operations.

Competitor Woolworths says it managed to keep its price movement steady at 3.5% and its underlying product inflation at 3.9% for the 52 weeks ended 26 June.

Africa’s largest food retailer Shoprite reported maintaining internal selling price inflation for the 52-week period ended 3 July at 3.9%, despite seeing an acceleration in the fourth quarter that saw inflation in the second half of the period nearing 5%.

Shoprite chalks up 9.6% annual sales rise

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In its operational update for the 2022 full-year period, Shoprite’s sales climbed to more than R184 billion (US$10.9 billion) – 9.6% higher than the 52 weeks in the previous reporting year.

Taking into account the additional week of sales, the group increased sales by almost 12% on a 52-week basis.

The retailer’s sales were bolstered mainly by its South African supermarkets business, which achieved sales growth of 10.1 percent, while sales at its liquor business rose by 44.5% as lockdown restrictions on the sale of alcohol eased, it said in its trading update.

Outside South Africa, its sales rose by 10.4 percent, while its other businesses, such as the OK grocery franchise and Checkers Food Services, grew sales by 8.5%.

Woolworths points to massive growth in online food delivery

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Meanwhile, upmarket retailer Woolworths, in its trading update for the full-year ended June 2022, reported a 1.4% increase in group turnover and concession sales.

The improved performance for the year was aided by the improvement in trading conditions in the second half, which saw group turnover growing by 4.9%.

“This was despite the volatile global backdrop, supply chain disruptions exacerbated by the Russian invasion of Ukraine, the impact of rising inflation and interest rates, and severe load-shedding in South Africa,” the group says.

The group’s food business registered a 4.2% rise for the year. It noted that this segment’s performance reflected a return to out-of-home consumption by the consumer and low product inflation across key categories.

Also, Woolworths Food saw a 45% increase in online sales driven in part by its new Woolies Dash delivery service. Online sales contributed 3.2% to sales in its South African food division.

Pick n Pay sees big jump in booze and online sales

Releasing its quarterly update, Pick n Pay reported a 10.7% growth in sales for the 18 weeks ended July 2, 2022, bolstered by increases in liquor sales, along with an enormous jump in online sales.

Group liquor sales for the period increased 17% year-on-year, while total online sales for the period, including scheduled delivery, click and collect, and asap! (Formerly Bottles) – the group’s on-demand online service, almost doubled surging by 97.3%.

Pick n Pay’s South Africa segment grew sales by 10.5%, while the Rest of Africa’s revenue increased by 18.9%, or 9.5% on a constant currency basis.

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