Shoprite earnings curbed by alcohol ban

South Africa’s biggest retail group Shoprite updated the market on its operations for the six month period ended 27 December 2020, highlighting the impact of the alcohol ban on its local operations.

Despite tough trading conditions in what is a depressed economy, exacerbated by the Covid-19 pandemic and nationwide lockdown, Shoprite said that the total sale of merchandise increased by 4.7% to approximately R83.4 billion.

The group said however, that its LiquorShop business reported a 21.8% drop in sales.

Due to the Covid-19 nationwide lockdown regulations, Shoprite said that its LiquorShop business was required to close for trade on Fridays and/or weekends and more recently, close completely. The total number of days our liquor business was closed totalled 79 days over the six months: 60 days during the first quarter and 19 days during the second quarter.

The group’s core business, Supermarkets RSA, contributing 78% to group sales, achieved sales growth of 5.6% -n like-for-like 4.8%. Supermarkets RSA, excluding LiquorShop sales, achieved sales growth of 7.8% – like-for-like 5.7% – it said.

Checkers and Checkers Hyper reported sales growth of 11.1%, Shoprite and Usave reported sales growth of 5.6%, and Supermarkets RSA opened a net of 45 stores over the reporting period.

Other operating segments

The group’s other operating segments, comprising OK Franchise, Transpharm, MediRite Pharmacies, Checkers Food Services (CFS) and Computicket, reported sales growth of 10.0%.

“The MediRite Pharmacies and Transpharm business traded well. Both CFS and Computicket were negatively impacted by Covid-19 lockdown regulations given their reliance on tourism, hospitality, travel and eventing.”

The group said its OK Franchise division remained resilient, achieving sales growth of 8.1% despite the impact of the liquor lockdown restrictions.

The OK Franchise business added a net of 28 stores, Shoprite said.

Read: Pick n Pay, Shoprite, Woolworths and others under investigation over alleged price gouging

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Shoprite earnings curbed by alcohol ban