Listed supermarket group Shoprite has recorded an increase of 11,8% in its total turnover for the first three months of its 2006 financial year (July to September 2005) compared with the same period a year earlier, the group said in a trading statement on Thursday.
Operating profit and operating margins were on budget, Shoprite said. The growth continued the sales trend that characterised its 2005 financial year.
Although food inflation increased marginally, it remained well below the consumer price index (CPI), with many staple products selling at prices below those of a year earlier.
All three of the company’s chains — Shoprite, Checkers and Usave — returned solid growth, with Shoprite in particular reporting increases in basket size and the number of customer transactions, the company revealed.
Shoprite’s market share increased marginally as well.
In line with the rest of the furniture sector, its furniture division was starting to reflect the slowdown in consumer spending with a turnover growth of 13,9%.
Shoprite’s operations outside of South Africa recorded sales growth of 12,9% in rand terms and 16% in stable currency terms over the three months, it added.
In the first three months of the 2006 financial year, the company opened eight supermarkets and five Usave outlets, and it is on track to open a further 32 stores by the end of December. Of these, 20 will be located in South Africa and 12 outside its borders.
The opening of 34 own stores has thus far been confirmed for the second half of the financial year.
Looking ahead, Shoprite said it is confident that the growth trend of the first quarter will continue in the second quarter. However, it cautioned, a decision by the government to curb consumer spending by increasing interest rates could lower such expectations.
In that case, the sale of durable and semi-durable goods would be affected more than that of foods, as the lower income groups tend to be less affected by such changes, Shoprite noted. — I-Net Bridge