South African supermarket group Shoprite believes Africa is a viable growth opportunity and will be opening four new stores in Angola and five in Ghana during the next year.
CEO Whitey Basson says because consumer preferences are similar to those in the South African market, the group’s proven South African business models can be easily replicated, operations are within easy reach, there is no formal opposition, while there is substantial GDP creation in Africa outside of South Africa.
For the year ended June 30, revenue from Africa in stable currency terms was up 32%.
“The Group’s objective for Africa is to gain a foothold in the most lucrative markets as soon as possible,” said Basson.
To date, Shoprite has established operations in Zambia, Uganda, Tanzania, Mozambique, Malawi, Namibia, Botswana, Lesotho, Swaziland, Mauritius, Madagascar, Egypt and Zimbabwe.
During the next year a further 32 stores will be opened. In addition to opening new stores in existing territories, four stores are due to open in Angola, five stores in Ghana and a hyper-store in India, he added.
“Expansion to India presents a valuable opportunity to export the Group’s proven success in meeting the needs of Indian customers. The market is particularly under-serviced in the formal, low-cost, first-world offering.
“Shoprite is entering the market with a small initial investment, as landlords exist and all international suppliers are already operating in the country,” he said.
Operations outside South Africa contributed R2,6-billion or 10% of Shoprite’s revenue for the year ended June 30 compared with R2,3-billion a year ago.
The group reported headline earnings per share down 20,1% to 57,6 cents for the year ended June 30 from 72,1 cents a year ago. It reported an exchange loss of R133-million due to the stronger rand, compared with a R24-million profit a year ago.
Headline earnings per share excluding the effects of the exchange differences, were up 23,2% to 80,1 cents from 65 cents a year ago, the company said.
A final dividend of 16,5 cents per share was declared, up from 14,5 cents for the same period a year ago. The total dividend for the year was 20% higher at 30,5 cents from 25,5 cents before.
Revenue was up 12,94% to R24,971-billion from R22,110-billion before, with total sale of merchandise up 13% to R24,8-billion from R22-billion a year ago.
The group’s position as the largest food retailer in Africa was further entrenched, with operations now comprising 641 stores in 14 countries employing 66 000 employees.
Supermarket revenue grew by 10% to R23,7-billion while Checkers same-store sales were up 15% over last year. The furniture division delivered revenue of R1,292-billion, which represents an 18% growth from a year ago for OK Furniture, and an increase of some 20% for House & Home. – I-Net Bridge