ShopriteHeader
What sets us apart


The Shoprite Group strives to generate long-term sustainable growth for our equity investors through our established food retail business operations in 15 economies on the African continent.

We are focused on cost-effective operational performance throughout our large footprint of leading technology-enabled retail operations and distribution channels, as described in this report. This, together with our strategic focus areas, provide further context for the investment case.*


We operate 1 845 corporate-owned food and liquor retail stores, supported by considerable distribution infrastructure and an integrated enterprise-wide information and technology system, across 15 African countries – a profile unmatched by any other retailer on the continent. In addition, our OK Franchise brand extends across the whole food retail convenience market with 460 stores.

Over the past 30 years, the Group has built extensive brand trust, recognition and goodwill in the countries where we operate, as shown by our top ranking in Brand Africa’s 2019 Top 100 brands survey. Our skills and execution are unrivaled and we are well positioned for when the economies in which we operate outside of South Africa rebound. The medium- to long-term opportunity provided to us as the established food retail leader on the African continent will be worth the current challenges, which resulted in a loss in our Non-RSA division during 2019.

In recent years, our approach has evolved to put the customer at the centre of all our thinking and development: our decisions aim to save our customers time and money, and increase convenience for them. We prioritise affordability across the business, which for some segments means a R5 deli meal and in others means reaping the benefits of our rapidly expanding private labels. We are also expanding our digital services portfolio to respond effectively to a greater range of customer needs.

The Shoprite Group includes four major corporate-owned and -operated food retail brands: Shoprite, Usave, Checkers and Checkers Hyper, together with operations serving the furniture, pharmacy and food services market. The Group generates the majority of its R150 billion turnover from food retailing, about 75% of which stems from its core division, Supermarkets RSA. We operate in 14 other African countries and we estimate our share of the food retail market in South Africa to be the largest of all the major retailers. Beyond food retail, the Shoprite Group operates substantial businesses in the categories of liquor, pharmacy, general merchandise, furniture and the franchising of food and liquor. Across our brands, our diverse store formats range from large hypers to smaller convenience formats. Aside from our furniture division, which now generates 12.7% of its sales on credit, the Group’s turnover is generated entirely through cash sales.

The Shoprite brand champions low prices for the people, providing almost 70% of South Africa’s population with access to the lowest prices on a wide range of commodities and grocery items. The business’s unwavering 40-year customer commitment to “lower prices you can trust, always” remains at the centre of everything we do and we monitor, on a daily basis, our pricing relative to peers. At Shoprite we are constantly focused on practical solutions to saving our customers money, across all facets of our business.

Our Usave brand is a no-frills, hard discounter, with a limited range of basic commodities at stripped-to-the-bone prices. It serves a traditionally underserved market segment, taking food retailing right into the heart of communities. Usave store fixturing is minimal and product ranging is limited to basic necessities, with a strong focus on our own private label ranges, offering customers unequalled value for money. The most recent addition to the Usave store portfolio is a container store format branded Usave eKasi, which translates to “my community”. The eKasi store uses five or six shipping containers carrying roughly 1 000 products. This flexible format allows us to establish outlets where bigger, formal stores would not be viable.

We believe in the significant opportunity that exists from growing our share of the mid-to-upper segment of the food retail market, where historically we have been under-represented. This market segment demonstrates greater resilience in South Africa’s current economic context. We have made great strides with our Checkers brand in recent years by improving and extending our convenience ranges while aligning our products with healthy eating and cleaner living. We are also modernising stores where appropriate, upgrading to our new FreshX store concept.

The OK Franchise Division includes three different retail formats: OK Foods, OK MiniMark and OK Express, as well as a liquor outlet (OK Liquor) and a wholesale outlet (Megasave). It has a wide geographic reach, serving both metropolitan and rural and remote areas. Its success stems from the powerful combination of community-based ownership and the Shoprite Group’s infrastructure and buying power support. In recent years, its rebranding has ensured it presents a single, consistent brand and the franchise is performing well.

Our services extend beyond bricks-andmortar supermarket retailing. We are meeting different consumer needs, as well as providing services to other businesses. These include our LiquorShop outlets, MediRite pharmacies (supported by our pharmaceutical wholesaler Transpharm) and Checkers Food Services.

Our in-store money market kiosks offer a range of value-added services, including bill payments, cross-border money transfers and travel tickets, while our web-based Computicket business sells nation-wide event tickets both online and in-store. We have recently embarked on a new standalone store format, K’nect, which sells cellular products and services as well as entry-level financial services products. We are also building a new media business using the Group’s existing customer and store assets as a platform, called Rainmaker Media Services. We will start selling our own physical (in-store collateral) and digital (mailers, website banners and preferential in-app space) assets, combined with customer insights for fast-moving consumer goods (FMCG) suppliers and other advertisers.

The Shoprite Group began its centralised supply chain journey about two decades ago and we have consistently raised the bar in this area ever since. Our primarily corporate-owned store base, coupled with our company managed centralised supply chain model, provides us with a closed-loop supply chain eco-system, giving us the visibility to manage and integrate the end-to-end supply chain right down to shelf level, and to derive benefits beyond centralised buying, warehousing, distribution and logistics. Our information and technology (IT) capabilities allow us to prioritise and execute tasks consistently using context-specific analytics across the supply chain. Through integrated planning, procurement, logistics and sales, we continue to optimise our business efficiency at scale.

The Shoprite Group has invested considerably in information and technology in recent years. Over the past year, we implemented an enterprise-wide system as a consistent, integrated product and transactional data platform for all supermarket operations. This platform allows realtime line of sight to integrate planning, supply chain management, sales and supporting activities, including international trade compliance, across the entire supermarket business.

The Shoprite Group is whole-heartedly committed to training, skills development and employment in Africa, as our staff complement of 147 268 attests. We are proud to be the largest employer, after government, in South Africa. Our commitment to employment, as evidenced by our consistent growth in this area each year, is in stark contrast to escalating South African unemployment, which currently stands at 29% (Q2 2019). With youth unemployment in South Africa at chronic levels, we are pleased to report that much of our growth in employment is focused on this segment. About 69% of our staff are between the ages of 18 and 35. In 2019 we created 3 175 new jobs and trained 5 079 unemployed young people through our Retail Readiness Programme and our participation in the South African government’s Youth Employment Service (YES) initiative.

Reliable and consistent returns for our shareholders remains a focus area for the Group. Our policy is to return capital to shareholders as a dividend calculated at twice the value of cover using headline earnings per share, however this year, we adjusted our headline earnings for the non-cash hyperinflation gain. In rand terms, the dividend payment has declined this year, following the high base created in prior years, during which our Non-RSA business generated significant profits under more favourable economic conditions.

The focused execution of our retail proposition, supply chain support and lean cost structure results in a leading trading margin. The Group has consistently reported trading margins above 5% in its Supermarkets RSA segment, an enviable return for our region that compares favourably with international standards. Following another year where we have held thousands of key lines in deflation, we achieved a trading margin of 5.3% in Supermarkets RSA – testament to our ability to keep goods affordable without unsustainable price cuts. At a Group level, after accounting for a difficult year in our Non-RSA markets, our trading margin measured 4% in 2019 and, including the hyperinflation adjustment, a trading margin of 4.6%.

We are committed to continuously improving transparent and accountable governance. We govern compliance and risk in line with our commitment to increase transparency and accountability as part of good corporate governance. We have assessed our risk landscape and our enterprise risk management framework is configured to achieve integrated risk and compliance monitoring on a daily basis across our operations.

We acknowledge the importance of environmental, social and governance (ESG) matters in our business, and our commitments are demonstrated by embedding them in our values. As the largest retailer on the African continent, we recognise that we can make a significant and positive impact in the countries and communities in which we operate. Within this context, we have worked hard over the past few years to create the internal systems and capacity necessary to support our long-term ESG ambitions. We continue to align our sustainability work with the United Nations’ Sustainable Development Goals, focusing primarily on fighting hunger, giving access to quality education, providing decent work and promoting sustainable production and consumption. This gives us a social licence to operate and makes business sense.


*Information and data taken from the Integrated Annual Report (2019) and was correct at the time it was published.