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Market share and profit growths in a tough environment point to the Group’s exceptional, industry-leading performance.
The Shoprite Group produced an industry-leading performance in the 26 weeks to 31 December 2017 with growth in turnover, profit and market share.
- Pieter Engelbrecht, Chief Executive
This helped offset a 0.4% decline in turnover of Non-RSA supermarket operations, measured against an exceptional prior year increase of 32.3%.
The Group’s 1 451 South African outlets, which generated 81% of supermarket sales, continued to lead the industry with their superior supply-line infrastructure, on-shelf availability and customer-centric focus.
Checkers’ sharpened focus on high income group customers contributed to the Group’s overall 0.44 percentage point increase in market share, which proves its resilience in less favourable periods.
Checkers grew sales by 9.6% in South Africa and gained market share on the back of significant improvements in service, enhancements to fresh products and convenience food offerings and upgraded store design.
The flagship Shoprite chain, with its focus on middle and lower-income consumers, remained fully exposed to the effects of a strained economy, and sales increased by a creditable 6.2% under the circumstances.
Usave performed exceptionally well, as did the Furniture and Franchise divisions.
Non-RSA supermarkets, spread across 14 countries, had a challenging six months.
Supermarket sales in Angola were down 9.5% in local currency (against prior year growth of 155.4%), reflecting last year’s exceptional performance, a drop in internal inflation of 17.3 percentage points across the Non-RSA operations and a more competitive landscape.
Nigeria’s turnover growth in local currency was 9.3%, hampered by import restrictions and forex shortages in the country. Zambian operations, however, are starting to show positive growth, with sales up 4.5% in local currency.
Expansion in Africa continues with a planned entry into Kenya before the end of 2018, where weakened competitor positions have opened a window of opportunity, to strengthen the Group’s presence in East Africa.
Engelbrecht pointed out that while in the prior year, Non-RSA operations did much better than the South African operations, “this year reflects an inversion of the trend and validates the strength of our strategy which includes geographical diversification and the extraction of value across all operations and brands.”
The Group opened a net 158 new stores in the past 12 months and at end-December was trading from 2 811 outlets, employing more than 148 000 people after adding 4 254 jobs in the reporting period.
Renewed consumer confidence, political developments and the strong rand point to the potential for improvements in sales and profitability.
Sales in the Non-RSA business will remain under pressure in the coming months, as currency weakness, low commodity prices and forex shortages continue to hamper economic growth in most territories. The Group is committed to each and every territory in which it operates, and continues to look for growth opportunities across the continent.