Food retailer Shoprite Holdings is expecting an “exciting” and much-improved second half of 2004 compared with the same period in 2003, with its turnover in the three months from July to September rising by 9,3% on a like-for-like basis, continuing the upward sales trend it experienced in the latter part of its financial year to the end of June 2004.
In a trading statement on Thursday, corresponding with the company’s annual general meeting, Shoprite said that given the positive consumer confidence, it is looking forward to an exciting Christmas trading period.
Turnover and operating profit for the six months to the end of December are expected to be better than for the corresponding period in 2003, when sales were adversely impacted by a countrywide strike that affected primarily Shoprite stores.
Shoprite’s share price rose 14 cents or 1,3% on the news. The counter was last quoted on the JSE Securities Exchange at R11,40 versus R11,01 at Wednesday’s close, a gain of 35% on the day so far.
Commenting on recent developments, Shoprite said that turnover growth for the past three months had been achieved despite very low food inflation that varied between 1,6% and 2,7%, with many staple products still selling at prices below those of a year ago.
Operations elsewhere in Africa were still hampered by the effects of the strong rand.
The group’s operating profit and operating margins were on budget, however.
All three of Shoprite’s fast-moving consumer goods chains — Shoprite, Checkers and Usave — had shown sustained growth, while its furniture division continued to grow turnover above 20% and in line with the rest of this buoyant sector.
The high level of consumer confidence was reflected in growth in basket size above the inflation rate, as well as an increase in the number of customer transactions.
The group had improved market share marginally on a same-store basis.
In the three months to date, three supermarkets and eight Usave stores were opened, and a further 21 stores will be opened by December, the company said. Of these, 26 will be located within South Africa and six outside its borders. Shoprite plans to open a further 115 stores in the period to December next year. — I-Net Bridge