South Africa-based Shoprite Holdings has posted a 6.3% increase in turnover in the first half of its financial year, reporting R75.8 billion worth of sales for the period.
Trading profits were up 6.3% to R4.1 billion, while diluted headline earnings were up 14.2% to 525.2 cents per share.
The retailer, which is the largest grocer on the African continent, said that its South African supermarket operations were a key driver of its sales performance.
“Results were boosted by a strong performance in our core South African supermarket operations, which grew turnover by 7.8%,” said Pieter Engelbrecht, the company’s chief executive.
The group's 1,451 South African outlets account for 81% of the group's sales.
Its Checkers brand saw a 0.44% increase in market share during the period, growing its sales by 9.6%.
Its Shoprite banner, meanwhile, posted a sales increase of 6.2%
Trading Profit
“In South Africa, where we sold 4.1% more products and grew customers by 4.1%, we managed an 11.7% increase in trading profit despite our internal inflation dropping seven percentage points to just 0.4%, with more than 5 000 of our products selling at lower prices than last year," Engelbrecht added.
"The Group will continue to shield South Africa’s poorest consumers, having subsidised 80 million loaves of brown bread at R4.99 without any price increases for two years."
The South Africa performance helped offset a 0.4% decline in turnover of Non-RSA supermarket operations, measured against an exceptional prior year increase of 32.3%.
African Continent
The group's supermarkets outside South Africa, which are spread across 14 countries, had a 'challenging' six months, the company said.
Supermarket sales in Angola were down 9.5% in local currency (against prior year growth of 155.4%),while Nigeria’s turnover growth in local currency was 9.3%, hampered by import restrictions and foreign exchange shortages in the country.
Zambian operations saw sales up 4.5% in local currency.
'Expansion in Africa continues with a planned entry into Kenya before the end of 2018, where weakened competitor positions have opened a window of opportunity, to strengthen the Group’s presence in East Africa', the retailer said.
“This year, we have scaled back the pace of expansion in Non-RSA operations, while we have made use of our flexibility, innovation and customer science data to make the most of growth opportunities locally," added Engelbrecht.
"This reflects the efficiency of our hedging capabilities.”
The Group opened a net 158 new stores in the past 12 months and at end-December was trading from 2,811 outlets across Africa.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
