South Africa’s largest retailer reports growth – despite liquor trade setbacks
South Africa’s largest food retailer, Shoprite, says that its liquor business was severely impacted by Covid-19 lockdown regulations, being unable to trade for 144 days over the past financial year.
Despite this setback, the Shoprite Group increased total merchandise sales from continuing operations by 8.1% to approximately R168 billion for the 53 weeks ended 4 July 2021.
Excluding the impact of the closure of the RSA LiquorShop business, the group said it increased total sales of merchandise from continuing operations by 8.3% (52 weeks: 5.9% to R157.1 billion).
The group’s core business, Supermarkets RSA, contributing 79.7% to sales from continuing operations, achieved sales growth of 9.3%. Like-for-like sales grew 7.3%, it said.
Supermarkets RSA, excluding LiquorShop, achieved sales growth of 9.7%, with like-for-like sales for the year measured at 7.5%.
Checkers and Checkers Hyper reported sales growth of 10.9%. This is notwithstanding the high base reported for the second half period last year, it said.
Shoprite and Usave reported sales growth of 8.8%.
The group’s LiquorShop business’ sales increased by 4.4% – first-half sales declined 21.8%, while second-half sales grew 53.6%.
“Growth was significantly impacted by the mandated liquor trade closures forming part of Covid-19 lockdown regulations. In total, our LiquorShop business was closed for 144 days over the 53 weeks – 79 days during the first half and 65 days during the second half,” it said.
The group’s other operating segments, comprising OK Franchise, Transpharm, MediRite Pharmacies, Checkers Food Services (CFS) and Computicket, reported sales growth of 10.0%. Its OK Franchise division achieved sales growth of 8.2% and added a net of 36 stores over the reporting period.
Shoprite reiterated that the terms of sale of its Retail Supermarkets Nigeria Limited (RSNL) subsidiary have been concluded, and its Kenyan operations have been closed. “Furthermore, in line with the group’s Non-RSA review process, our operations in Madagascar and Uganda have been classified as discontinued,” it said.
Shoprite provided an earnings guidance showing that headline earnings per share for the 53 weeks ended 4 July 2021 are expected to reflect the following:
- From continuing operations: Basic HEPS are expected to increase by 15.3% to 25.3%.
- Including discontinued operations: Basic HEPS are expected to increase by 24.1% to 34.1%
Shoprite plans to publish its 2021 year-end results on Tuesday, 7 September 2021.
Read: Massmart offloads ‘non-core’ stores and brands to Shoprite for R1.36 billion
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