Shoprite delivers as sales surpass R250 billion

Pieter Engelbrecht, Chief Executive Officer:

As a Group, we have surpassed the R250 billion sales mark this year. In rand terms, just our growth in sales this year equated to R20.6 billion. We prioritised customers, and in our core Supermarkets RSA segment gave back R16.5 billion at point of sale whilst remaining steadfast on containing our selling price inflation at 2.3%. We again created thousands of jobs and innovated across the board – not just on the digital and quick commerce front but also where, as a result, millions of South African households can eat better and transact for less. In doing so, as per our purpose, our customers live better lives. 

The business again worked incredibly well to deliver best-in-class pricing and availability together with unmatched deals and promotions. Doing this profitably across a base of 2 863 corporate-owned and managed stores requires expert execution. Credit and my sincere thanks are extended to our experienced and dedicated teams who worked together to deliver on a market leading strategy, which as always, prioritised our more than 30 million customers and their daily needs.

In respect of our core Supermarkets RSA segment this year, Shoprite and Usave’s turnover increased by 5.9%, equating to sales growth of R6.5 billion from a substantial base of R110.1 billion. Our customers remain pressured on a number of fronts, and disposable incomes are stretched. It is for this reason the teams pulled together to keep sell inflation at Shoprite (on a volume weighted basis) below 2%. Promotional participation was higher than 2024 but to compensate, Shoprite doubled-down in terms of its operational disciplines and managed to improve gross margins year-on-year.

Checkers’ value focused premium offer just goes from strength to strength. It continued to gain share, evidenced by sales growth of 13.8%, contributing an additional R11.6 billion taking it to an almost R100 billion brand in its own right. The gains are across the board but noteworthy this year was Checkers’ growth in fresh together with improvements in ranging and promotional execution. We opened 68 stores during the year, inclusive of 36 LiquorShop stores. With 350 supermarkets (including 40 Checkers Hypers), we remain of the view that Checkers’ incredible success in terms of its vision to democratise premium food retail, remains underrepresented in the South African market. Our strategy to continue the conversion of existing stores to our winning FreshX format whilst opening stores in areas we are underrepresented remains one of our top priorities over the medium term. 

With respect to the sales included in our Supermarkets RSA segment from our on-demand ecommerce platform, Sixty60’s sales increased by 47.7%, equating to R18.9 billion this year. Success measures outside of its growth and sales quantum include its incredible brand advocacy underscored by the Sixty60 customer experience, evidenced by its 94.0% on-time deliveries and 96.8% order fulfilment.

You will see in this result, referring to our discontinued operations specifically, that we continued to reduce our exposure to markets where our operations were sub-scale and our capital was better allocated to regions and operations where our expertise generates higher growth and superior returns. With respect to the sale of our furniture business to Pepkor Holdings Ltd (“Pepkor”), our decision to sell was premised on our desire to see the businesses supported with the necessary systems and expertise it requires to ensure its continued growth and importantly, protect the jobs of our loyal employees. Following the Competition Tribunal granting a competitor intervention rights at a late stage in the merger proceedings subsequent to the Competition Commission recommending the transaction for approval, we are entering into a second year of operating a profitable furniture business which has been classified as discontinued and as such excluded from the Group’s profitability on a continuing operations basis, whilst not having received the sale transaction proceeds. Delays of this nature are unproductive for these businesses and our employees in them and as a result we seek transaction conclusion as soon as possible. 

We are clear in terms of our pursuit of building out our omnichannel retail platform in South Africa as a basis for our future growth, leveraging the Group’s core South African corporate-owned store base which places us within five kilometres of 85% of South African households. In support of our plan this year, we launched the new Checkers transactional website, making our full range available for customers to find, purchase and have delivered within one hour through online search. In addition, we re-platformed Sixty60 whilst adding general merchandise delivery from our Checkers Hypers to our on-demand offer. These substantial steps build on the strong foundation we have established as we extend our delivery offer across our other categories and trading formats in the future. In line with our Group purpose to uplift the daily lives of our customers, our omnichannel plan is guided by our quest to be South Africa’s “everyday store”. With Sixty60 recently crossing the 100 million order mark I think it’s fair to say we are making inroads in terms of our ambition, and I couldn’t be prouder of this result and more so, our 168 000 employees who as a team, continue, I believe, to represent best-in-class retail and customer centricity.

In closing, to our valued customers, thank you for your continued patronage. We remain humbled by your acknowledgement of our efforts to bring you the best, for less. A new year is upon us, one over which we hope that as a result of your ongoing support we will continue to grow and invest to the benefit of the Group’s many stakeholders.