Jan 10, 2006
For the six months to 1 January 2006, comprising 26 weeks, the Shoprite Group increased turnover by 9,4% to about R16,7 billion, compared to the corresponding six months of 27 weeks. If the additional week of the previous reporting period is disregarded, turnover growth was 13,7%.
All other comparatives contained in this Trading Statement have been calculated on the basis of a 26-week period.
The six months of the review period lived up to Management's expectations, with all its retail divisions reporting solid turnover growth in an environment in which internal food inflation in its different brands averaged 2,5%. The strong surge in sales at the lower end of the market was bolstered by government's wide-ranging support for low-income earners.
The Shoprite brand's turnover growth mirrored the continuing high consumer confidence especially at the lower end of the market. It grew sales in existing business by 8,3% and overall by 13,4%. A total of 26 new stores were opened during the reporting period.
The Checkers brand increased its appeal to higher-end consumers by further improving its ranging, especially of convenience and fresh products. It increased turnover on existing business by 7,5% and total turnover by 12,5%. It added 10 new outlets to its store complement.
Strong consumer support for the Usave brand resulted in a net gain of 9 new outlets during the period to bring the total number of stores of the Group's youngest chain to 93. Sales growth of 37,7% continue to exceed budget.
Lower turnover growth in the Furniture Division confirmed market speculation that this sector is slowing down after a boom period lasting almost three years. The division nevertheless grew turnover by 14,0% in a highly competitive environment.
The Group's non-RSA operations performed satisfactorily, with sales increasing by 18,4% at constant conversion rates. Due to lower volatility in certain African currencies, this turnover increase translates into 17,3% in rand terms.
The Group successfully launched its first store in Nigeria in December.
Towards the end of the review period the acquisition of two businesses by the Group – Food World with 13 branches and Computicket – was finalised. Their contributions had only a marginal effect on group turnover.
The above financial information has not been reviewed or reported on by the Shoprite Holdings' auditors. The results for the review period discussed above will be published on Wednesday, 22 February 2006.
Whitey Basson, CEO, or Carel Goosen, deputy managing director (tel 021 980 4000).
Date issued 10 January 2006
Sponsor Nedbank Capital