Shoprite Reports Growth But Says It Spent R500m On Diesel In Six Months

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JOHANNESBURG: Same-store growth of 11.1% in the half-year was driven mainly by price increases of 9.4% rather than volume growth.

SA’s biggest grocer, Shoprite, reported like-for-like growth of 11.1% in the six months to January 1, mainly explained by rising prices as inflation hit, while the group spent more than R500m on diesel for backup generators to power its stores.

The group is reporting 46 months of market share gains, a record Black Friday and festive season, and overall growth figures of 17.5%. This puts it head and shoulders above competitors, with the Checkers owner growing sales faster than Pick n Pay and Woolworths, though their slightly different reporting periods complicate precise comparisons of results.

A record Black Friday and festive season helped Shoprite deliver double-digit first-half sales growth as it spent more than half a billion rand to keep the lights on during one of SA’s worst-ever periods of load shedding.

“The growth in sales reflects a record Black Friday and festive season, underpinning 46 months of uninterrupted market share gains,” it said.

Across the Shoprite group, the total sale of merchandise rose 16.8% to about R106.3 billion.

But this kind of growth also came at a price with the company saying it had to fork out an additional R560 million during the half on diesel to operate generators across its South African supermarkets store base in order to “trade uninterrupted during load shedding Stages 5 and 6”.

The market cheered the update with the retailer’s shares rising more than 2% to R249.82 on Tuesday morning.

Internal price inflation increased 9.4%, which Shoprite said reflected its “product mix exposure to commodities, where selling price inflation has been notably higher”.

The retailer’s top brands all delivered double-digit increases with Supermarkets RSA – represented by Shoprite, Usave, Checkers, Checkers Hyper and LiquorShop – sales delivering a standout performance with a 35.6% increase in sales.

Checkers and Checkers Hyper reported sales growth of 16.9%, while Shoprite and Usave reported sales growth of 15.1%.

Shoprite’s rest of Africa stores also increased sales 17.5%, contributing 9.4% to group sales. In constant currency, these stores increased sales by 6.9%.

The company’s furniture division, which includes OK Furniture, OK Power Express and House & Home, reported an 8.6% increase in sales, with sales increasing 5% on a like-for-like basis.

Shoprite’s “other” operating segments, including among them Transpharm, Medirite Pharmacies and Checkers Food Services, among others, reported sales growth of 12.5%.