South African supermarket giant Shoprite’s full-year profit jumps

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South African supermarket giant Shoprite’s full-year profit jumps

10:45 CAT | 05 Sep 2023

FILE -Shoprite Holdings Chief Executive Pieter Engelbrecht reports on his company’s results in Cape Town, South Africa, February 21, 2017. [File photo: Reuters/Mike Hutchings]

South Africa’s biggest supermarket group Shoprite Holdings SHPJ.J reported a 9.6% rise in annual profit on Tuesday on the back of a double-digit sales growth across its food stores and the integration of 92 Massmart stores in the second half.

Shoprite, which has more than 3,300 stores, posted headline earnings per share from continuing operations of 1,166.2 cents in the year ended July 2, from 1,063.9 cents a year earlier.

Amid a cost-of-living crisis the retailer, which competes with Pick n Pay PIKJ.J, SPAR SPPJ.J and Woolworths WHLJ.J, gained record levels of market share, Chief Executive Pieter Engelbrecht said, increasing sales by 16.9% to 215 billion rand ($11.20 billion).

Consumers flocked to its budget chains for discounts, while its investment in its upmarket Checkers brand also continued to attract bigger wallets. This all contributed to 17.8% sales growth within its core South African supermarkets division.

Like its rivals, Shoprite is grappling with rising costs, including running diesel generators to keep its operations going as state utility Eskom struggles to keep the lights on.

The group spent 1.3 billion rand on diesel in the year.

Meanwhile, its exposure to higher inflation commodity lines meant its products were 10.1% more expensive compared to last year’s 3.9% price inflation.

Source: Reuters