Get more Mail & Guardian
Subscribe or Login

Shoprite delivers strong sales in SA market

 

 

A difficult trading environment has not stopped the Shoprite Group Holdings from producing impressive results for the three months ending September 2019, with the company seeing a 7.3% growth in turnover during the period.

South Africa’s largest grocer saw its local operations increase sales by 10.3% during the quarter, with prices at its stores increasing by 3% over the period.

Portfolio manager at FNB Wealth and Investments, Kabelo Tshola said that the group’s performance shows a normalisation of its sales following various disruptions to its production during the same period last year.

“The [South African] operations reflect a resumption of their distribution centre after a prolonged strike and an IT upgrade. During this period the company lost market share in an already weak environment. This operational result reflects this regaining of market share whilst in a buoyant economy could be producing better numbers,” he said.

The group added 15 new stores across its trading brands including Usave (8), Shoprite (4) and Checkers (3). While the group’s furniture brand reduced by 10 stores, its LiquorShop added 10 stores to reach 500 stores across the country while its OK! Franchise Division grew its base by 10 stores during the quarter.

“The group’s other operating segments, which include the OK Franchise, Computicket, MediRite pharmacies and Checkers Food Services, reported a 6.4% increase in sales. The OK Franchise Division grew sales by 8.6%,” the group said on Monday.

“Whilst all three of our supermarket brands traded well, our hard discounter format, Usave led the growth,” it said.

The group introduced a customer loyalty rewards program called Xtra Savings in October through its Checkers stores, with more than one million members signing up within a week, exceeding the group’s expectations.

“This launch aligns with the Group’s focus to ensure our customers save more every day, paving the way for smarter decision-making and precision retailing. It also unlocks alternate revenue streams from existing and new customers,” Shoprite said.

But the backlash the group received in Nigeria following the wave of xenophobic violence in South Africa over the quarter weighed on its operations in the West African country, with overall sales in its non-SA operations declining by 4.9%. The group said that it is now looking at assessing its performance of its supermarkets in other African countries “with specific reference to the group’s return on capital invested in Africa.”

Wayne McCurrie from FNB Wealth & Investments said while aftermath of the xenophobic violence in South Africa marred the group’s operations in Nigeria, the main reason fro the poor perfomance is macro economic “these areas are just not doing well and suffer from currency and forex problems. They will not leave, but a good return [is] risking much longer than anticipated and remedial action is necessary” 

Vote for an informed choice

We’re dropping the paywall this week so that everyone can access all our stories for free, and access the information they need in the run up to the local government elections. To follow the news, sign up to our daily elections newsletter for the latest updates and analysis.

If our coverage helps inform your decision, cast your vote for an informed public and join our subscriber community. Right now, you can a full year’s access for just R510. Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Thando Maeko
Thando Maeko is an Adamela Trust business reporter at the Mail & Guardian

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Mission implausible for the DA’s man in Nkandla

Malibongwe Dubazane is contesting all 14 of the IFP-run Nkandla local municipality’s wards

Andries Tatane’s spirit will drive fight against ANC in Ficksburg

The nascent Setsoto Service Delivery Forum is confident it can remove the ‘failing ANC’ in the chronically mismanaged Free State municipality

Paddy Harper: On gleeful politicians and headless chickens

Paddy Harper doesn’t know who to vote for yet, since the Dagga Party isn’t contesting his ward, but right now what to order for lunch is a more pressing concern

Malema: ANC will use load-shedding to steal votes

While on the campaign trail in the Eastern Cape, EFF leader Julius Malema, without evidence, claimed the ANC was planning to use rolling blackouts to ‘steal votes’
Advertising

press releases

Loading latest Press Releases…
×