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” 

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

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

Related stories

Coronavirus and the economy: We didn’t prepare for tough times

South Africa was well-placed for the 2008 crisis. But R3.18-trillion debt and low growth hamper its ability to limit the economic effects of Covid-19

Coronavirus hammers global growth 

South Africa’s mining and manufacturing sectors are predicted to be down for the first quarter of 2020 because of low demand from China 

Pepsi’s Pioneer acquisition is not healthy

The move may provide a short-term economic boost, but it also has long-term health costs

Let’s go back to the NDP

To improve the South African economy, we need to institute practical measures to effect change

​Eskom will be fixed, service delivery improved, Ramaphosa promises at ANC 108

ANC president says only his party can improve lives, as Northern Cape residents lament their struggles in South Africa’s sparsest province

Our artistic herri-tage online

The viewer is in total control when navigating a website named after Herri the Strandloper, a soundmine of narratives and ideas
Advertising

Subscribers only

SAA bailout raises more questions

As the government continues to grapple with the troubles facing the airline, it would do well to keep on eye on the impending Denel implosion

ANC’s rogue deployees revealed

Despite 6 300 ANC cadres working in government, the party’s integrity committee has done little to deal with its accused members

More top stories

Finance probe into the Ingonyama Trust Board goes ahead

The threat of legal action from ITB chairperson Jerome Ngwenya fails to halt forensic audit ordered by the land reform minister

Ailing Far East Rand hospital purchases ‘vanity’ furniture

Dr Zacharia Mathaba, who purchased the furniture, is a suspected overtime fraudster and was appointed as Gauteng hospital chief executive despite facing serious disciplinary charges

Eusebius McKaiser: Reject the dichotomy of political horrors

Senekal shows us that we must make a stand against the loud voice of the populist EFF and racist rightwingers

Seals abort pups in mass die-off

There are a number of factors — a pollutant, virus or bacteria or malnutrition — may have caused the 12 000 deaths on Namibia’s coast
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday