7 September 2021

Another year of South Africa market share gains in 2021 as the Shoprite Group adds R12.6 billion in sales, creates 3 897 jobs and pays record dividend

Key information – continuing operations for the 53-week period

  • Sale of merchandise increased by 8.1% to R168.0 billion
  • Trading profit increased by 24.9% to R10.3 billion
  • Diluted headline earnings per share (DHEPS) increased by 20.1% to 952.5 cents (restated 2020*: 793.4 cents)
  • Adjusted DHEPS** increased by 20.7% to 883.8 cents (restated 2020*: 732.5 cents)
  • Full year dividend increased by 42.0% to 544 cents (2020: 383 cents)
  • Opened a net of 112 stores comprising 76 corporate and 36 franchise stores

Pro forma information – continuing operations for the 52-week period***

  • Sale of merchandise increased by 5.9% to R164.5 billion
  • Trading profit increased by 20.9% to R10.0 billion

* Restated for newly classified discontinued operations in accordance with IFRS 5: Non-current Assets Held for Sale and Discontinued Operations.
** The adjusted DHEPS constitutes pro forma financial information in terms of the JSE Listings Requirements.
*** The 52-week information provided constitutes pro forma financial information in terms of the JSE Listings Requirements.

 

Shoprite Group CEO, Pieter Engelbrecht
Shoprite Group CEO, Pieter Engelbrecht.

Pieter Engelbrecht, Chief Executive Officer

2021 was a challenging year for the countries in which we operate but as a result of the Group’s commitment and execution we increased sale of merchandise by 8.1%. In rand terms, this growth equates to an additional R12.6 billion in sales on last year’s restated base to total a record R168.0 billion in sales for the year. Adjusting for the extra week included in this year’s reporting period, on a 52-on-52-week basis our rand sale of merchandise growth on last year’s base measured R9.1 billion.

Our core Supermarkets RSA segment reported strong sales growth of 9.3% (52 weeks: 6.9%) from a high base and after accounting for our LiquorShop business being closed for 144 days during the year. The segment’s R133.9 billion in sales was a combined effort from our Shoprite and Usave businesses which increased sales by 8.8% and our Checkers and Checkers Hyper businesses, which increased sales by 10.9%. This growth is a testament to our loyal customers and the relentless commitment of our team who ensured we delivered unsurpassed value, either in-store or digitally, throughout the year.

It was a significant year for our Supermarkets Non-RSA segment given that we sold our Nigerian supermarket business, closed our operations in Kenya (three stores) and classified our operations in Uganda (five stores) and Madagascar (10 stores) as discontinued. The region remains challenging, but our capital allocation review coupled with various in-country initiatives have resulted in improved profitability.

The Group’s Furniture segment increased sales by 24.6%. It continued to benefit from consumers spending in the categories of furniture and electronics. There is no doubt, however, that the growth reported by OK Furniture and House & Home is also a result of the proactive nature of its hands-on management team, its focused brand and customer strategy and the positive impact from its store base consolidation executed in recent years. Our Other operating segments’ sales growth of 10.0% is commendable, especially considering that both Checkers Food Services and Computicket continue to be significantly impacted by COVID-19 and lockdown regulations. The OK Franchise brand goes from strength to strength, as evidenced by 8.2% sales growth this year.

There is no doubt the digitally led future being ushered in for many as a result of the COVID-19 crisis is already a day-to-day reality for Shoprite. However, from an IT perspective, with the adoption of our single system of record a few years ago, the team has become increasingly collaborative and innovative. This way of working influences our daily decisions across the business and plays an increasing role in our ongoing success. This is evidenced by the growth in our supermarkets sales and gross margin and by our market share gains which have continued uninterrupted for 28 months.

In addition to transforming how we operate, our IT re-platforming has facilitated and fast-tracked our transformation as part of our digital and data-led future strategy. The Group has recently unveiled ShopriteX, our digital tech hub which blends the best of data science, technology and digital talent to save customers time and money through innovation. After a year of incubation, ShopriteX already boasts two industry leading innovations, namely the Xtra Savings Rewards Programme, South Africa’s fastest growing rewards programme and Checkers Sixty60, Checkers’ pioneering 60-minute grocery delivery service. Consumer response on both counts has been unrivalled, with the Xtra Savings Rewards Programme signing up over 20 million members and Checkers Sixty60 becoming the number one grocery app in the country with over 1.5 million app downloads. The on-demand grocery delivery app has scaled rapidly, operating nationwide from 233 stores which serve as micro-fulfilment centres.

ShopriteX forms part of the Group’s strategy to grow and monetize its ecosystem of value for consumers. We’ve spoken often about the next era of growth for Shoprite being about precision retailing and that future is now here. ShopriteX will use our rich customer data to create a ‘Smarter Shoprite’ and ultimately fuse the best of digital with our physical and operational strength across the continent.

Reflecting on this year of significant achievement on so many fronts, my sincere thanks go to our Shoprite people for their continued commitment and efforts throughout 2021. Despite being South Africa’s largest private sector employer, we still aspire to create employment as it is critical to improve the lives of our fellow citizens. On that front, we added 3 897 new jobs this year.

Specifically, to our employees in central Gauteng and KwaZulu-Natal, in relation to the tragic civil unrest that took place the week after our year-end close, there are no words that do justice to my appreciation for all you did to get us back into the business of serving our customers despite the circumstances. We have started the process of rebuilding our KwaZulu-Natal and central Gauteng operations. Similarly, we have used our Usave mobile truck and container stores to sustain our customers in communities where there was literally no semblance of infrastructure left to salvage. As a company Shoprite can proudly reflect on the pivotal role it played in putting South Africa back together and we look ahead to a 2022 that ends vastly different to how it began.

 
 

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