South Africa’s biggest retailer sees sales boom – despite R500 million load shedding bill
Shoprite Holdings Ltd – South Africa’s biggest retailer – says sales have increased in all its operating segments, in spite of the challenges caused by load shedding.
The group said that its total merchandise sales reached approximately R121.1 billion (+13.9%) in the six-month period to 31 December 2023 (H1 2024).
The group’s core business, Supermarkets RSA, which contributes 80.5% to group sales, saw sales growth of 14.6% (like-for-like 6.3%).
This growth comes against the backdrop of a sales increase of 17.5% during the six-month period ended 1 January 2023 (H1 2023).
“Sustained high level of execution and continued customer momentum together with record Black Friday and festive season trade has extended the period of uninterrupted market share gains achieved by our core South African supermarket brands to 58 months,” the group said.
Checkers and Checkers Hyper reported sales growth of 13.7%, with Checkers Sixty60 online sales increasing by 63.1%.
Shoprite and Usave saw sales growth of 13.1%, while the LiquorShop sales increased by 25.2%.
The group said that, like the H2 2023, the period’s growth was boosted by the inclusion of the 94 stores from Massmart which were converted into:
- Shoprite (51 stores)
- Usave (1 store)
- Shoprite LiquorShop (42 stores)
When adjusting for the acquisition, the Supermarkets RSA segment saw sales increase by 11.2%.
The Supermarkets RSA, when inlcuding the stores acquired from Massmart, added a net 285 stores over the past 12 months to a total of 2,237 stores.
Outside the South African supermarket
When using the rand, Supermarkets Non-RSA’s sales grew by 6.2%, which contributed 8.8% to group sales.
In constant currency, Supermarkets Non-RSA increased sales by 20.0%, while nine stores were added over the last 12 months, taking the total to 258 stores operating in nine countries.
The group’s Furniture segment, which includes OK Furniture and House & Home, saw a sales increase of 1.7% (like-for-like 0.7%). However, the segment saw no new stores added over the last year, remaining at 432 stores.
The group’s Other operating segments, which includes OK Franchise, Transpharm, Medirite Pharmacies, Red Star Wholesale Catering Services (previously Checkers Food Services) and Computicket, saw sales growth of 23.1%.
The group’s sales to its OK Franchise operation increased by 25.0%, with its store base increasing by a net 70 stores to end the period with 605 stores.
Challenges
Despite the widespread sales growth across the group, it wasn’t all smooth sailing.
The group said that load shedding related power outages forced it to spend R500 million on diesel to operate generators across its South African supermarket business over the six months.
This means that the group spent roughly R2.75 million per day between 2 July (the end of FY23) and 31 December 2023.
The group also said that there was a notable increase in finance charges due to the South African repo rate being increased by the South African Reserve Bank.
Read: The ‘real’ value of the rand in 2024 – according to the Big Mac Index
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