Shoprite Reports 12% Sales Growth and Expansion Amidst Changing Food Prices
- Lethiwe Nkosi
- Jul 31, 2024
- 2 min read
Shoprite, South Africa’s retail giant, has announced a significant 12% increase in annual merchandise sales for the year ending June 30, 2024. This robust growth, attributed to new store openings and solid sales across its store brands, underscores the company’s resilience in a challenging economic environment.
The group’s total merchandise sales reached approximately R240.7 billion, driven by the addition of 292 new stores, including 73 OK Franchise locations, bringing its store count to 3,639. Shoprite’s Supermarkets RSA division contributed a substantial 81% to the group’s sales, growing by 12.3% to R173.6 billion. In contrast, Supermarkets Non-RSA saw a growth of 6.1% to R19.6 billion.
Despite the challenging economic conditions in Ghana, where hyperinflation has significantly impacted businesses, Shoprite’s operations outside South Africa showed resilience. The group applied hyperinflation accounting starting July 3, 2023, which reflects the ongoing economic turmoil in the West African nation.
In terms of food prices, the group reported a cooling trend, with internal selling price inflation averaging 5.8% for the year, down from 7.7% in the first half to 4.2% in the second half, and ending at 3% for June 2024. This trend aligns with the latest data from Stats SA, which revealed that annual food inflation has eased to its lowest level in 45 months.
The company also noted the growth in specific segments: Checkers and Checkers Hyper saw a 12.3% increase in sales, with Checkers Sixty60 online sales surging by an impressive 58.1%. Meanwhile, Shoprite and Usave sales grew by 10.7%, and LiquorShop sales rose by 20%.
Shoprite’s expansion strategy included opening 201 new Supermarkets RSA stores, including 20 Shoprites, 22 Usaves, 25 Checkers, and 71 LiquorShops. Other brands under the Shoprite umbrella also saw growth, with Petshop Science, Checkers Outdoor, UNIQ Clothing, and Little Me expanding their footprints.
However, the company faced significant costs due to load shedding, spending R754 million on diesel for generators. Despite a decrease in diesel costs from the previous year, Shoprite anticipates a mid to low single-digit increase in water and electricity expenses.
Shoprite Holdings is set to release its detailed year-end results on September 3, 2024, reflecting on its performance amid the fluctuating economic landscape and ongoing operational challenges.
