May 5, 2003
The Shoprite Group of Companies, Africa’s largest food retailer, listed 2,7 million shares on the Lusaka Stock Exchange (LuSE) at an initial listing price of 4,200 Kwacha per share. Shoprite Holdings Limited (Shoprite), which is headquartered in South Africa, listed on the LuSE on Wednesday, 19 February 2003.
The group has its main listing on the Johannesburg Stock Exchange and is also listed on the Namibian Stock Exchange and it’s ownership lies in the hands of its more than its 3 500 shareholders.
Shoprite has enjoyed a 35% annual compound growth in earnings per share since 1986 and 19% annual compound growth in its capitalisation over the same period.
The group owns 629 outlets and it has a loyal customer base of 10 million people and provides employment to 26 600 permanent and 43 000 temporary and casual employees. It achieved a turnover of ZAR 22.1 billion (US$ 2.4 billion) in the 12 months ended 30 June 2002.
Shoprite’s expansion plan into Africa started in 1995 with the purchase of 6 buildings in Zambia in accordance with a transaction concluded with the Privatisation Agency of the Zambian Government.
Refurbishment programs were put in place and by October 1995 the first Shoprite retail store opened in Cairo Road, Lusaka. A further 2 stores opened later that year in Ndola and Kitwe. During 1996, 4 stores were opened in Kabwe, Chingola, Mufulira and Livingstone and in the period 1997 – 1999 a further 6 stores opened with the store in Manda Hill being the flagship of the Shoprite investment in Zambia.
Shoprite Zambia currently operates 18 retail supermarkets together with 7 Hungry Lion outlets, Shoprite’s fast food initiative. Freshmark, Shoprite’s distributor of fresh fruit and vegetables, also operates in Zambia with a depot in Lusaka and Kitwe.
The investment in Zambia has shown steady growth with turnover increasing from K19bn in 1996 to K276bn for the year ending June 2002.
Shoprite is engaged in growing and developing its market share as the dominant player in retail markets throughout Southern Africa. It is the objective of Shoprite to hold 100% of its operations throughout the sub-continent in one seamless business, thereby maximising the purchasing power and optimising the efficient management of the operations.
As part of the strategy Shoprite intends, where and when appropriate, to apply for secondary listings of its shares on the stock exchanges of those countries in which it operates, thus creating an investment opportunity in a company which has a diverse geographic spread as well as greater liquidity in the shares.
The group’s market share in South Africa as at September 2002 was almost 30%. Its vision is to increase operating income from other African countries to more than 50% of Group revenue and aggressively expand throughout Africa in 2003 and 2004.
Shoprite’s primary business objective is to remain the price leader in its field. Research shows that price is the main determining factor in choosing where to shop for food and household basics, followed by food safety, hygiene, range and convenience.
Shoprite has a lean, efficient management structure, sophisticated information and management systems, and a state-of-the-art central distribution system for groceries, household items, non-food products as well as for fruit and vegetables.
The buying teams follow the strategy of buying direct from the farm or factory to ensure the lowest possible prices. Shoprite operates a chain of no-frills, efficient and modern stores that are cost efficient. Great care is taken to create a friendly atmosphere in line with its customers’ expectations.
Expansion beyond the borders of South Africa is an essential development for Shoprite as the potential for more large supermarkets domestically has almost reached saturation point. Shoprite has always supported the idea of the African Renaissance and believes its successes in Africa make this Renaissance a reality.
By opening stores across the African continent, the Shoprite Group of Companies is assisting with the upliftment programmes of other African countries by creating both job and skills development opportunities. The Company currently employs 3 500 employees in countries outside of South Africa, all of whom are local nationals.