Shoprite points to strong store growth and job creation in South Africa

Shoprite on Tuesday (6 September) published its annual financial results showing a 9.6% increase in group sales – equating to an additional R16 billion spent by customers over the period, compared to 2021 which included an additional week of trade.

The results, from continuing operations, for the financial year under review are for a 52-week period compared to 53 weeks in the previous financial year.

Group trading profit increased by 6.8% to R11.0 billion, and as a result, the trading margin measured 6% (2021: 6.1%). On a 52-week basis, group trading profit increased by 10.3%.

Supermarkets RSA’s trading profit increased by 7% to measure R10.1 billion (2021: R9.4 billion). The segment’s 6.8% trading margin compares to a 7.0% trading margin in the prior 53-week year, it said.

Shoprite said it created 4,316 new jobs in South Africa during the year.

Highlights:

• The sale of merchandise increased by 9.6% to R184.1 billion
• Adjusted basic headline earnings per share increased by 22.5% to 1,086.5 cents (2021: 887.3 cents)
• Diluted headline earnings per share increased by 10.0% to 1,048.1 cents (2021: 952.5 cents)
• Full-year dividend per share increased by 10.3% to 600 cents (2021: 544 cents)
• Excluding the impact of social unrest closures and re-openings, our core Supermarkets RSA operating segment opened a net number of 117 stores during the year

“We are proud of our 2022 results, especially considering our high base, the additional week included in our reporting calendar last year, and the headwinds presented by a challenging local and global context,” said Shoprite chief executive officer, Pieter Engelbrecht.

He said that the core South African supermarket segment (80.0% of group sales) increased sales by 10.1% (12.6% on a 52-week base). Shoprite and Usave, which make up 52.8% of this segment, increased sales by 7.2%.

“Despite having two large format Checkers Hypers still closed due to the July 2021 social unrest, our Checkers and Checkers Hyper supermarket business, which makes up 39.8% of our core RSA segment, increased sales by 9.1%,” said Engelbrecht.

Shoprite and Checkers LiquorShop business, 7.2% of the segment’s sales, increased sales by 44.5%.

In terms of price and value execution, the Shoprite and Checkers Xtra Savings Rewards Programme saved 24.7 million members R9.4 billion in the year, the chief executive said.

The group’s on-demand one-hour delivery app Checkers Sixty60 grew its sales despite its strong growth trajectory over the past few years and expanding the store base from which it services Checkers customers to 300 stores (2021: 233 stores).

Customer visits to Supermarkets RSA, which is represented by 1,789 stores, increased by 5% and average basket spend increased by 4.9%.

Internal selling price inflation measured 3.9% for the year as a result of an acceleration in the fourth quarter, which resulted in second-half inflation measuring close to 5.0%, Shoprite said.

At the end of the reporting period, the number of stores still closed due to extensive damage during the social unrest totalled 31 (including two Checkers Hypers). It is envisaged that nine of these will not re-open.

The Checkers supermarket chain contributed 39.8% of the Group’s core Supermarkets RSA segment’s sales. The chain’s store upgrade strategy continues, with a further 43 stores refurbished this year. In terms of new stores, Checkers opened 10 new supermarkets during the period, three of which were in the new neighbourhood Checkers Foods format (average size 1,153 sqm).

In addition, 21 Petshop Science stand-alone premium pet stores and one Little Me stand-alone baby store were opened during the year. Checkers, inclusive of Checkers Hyper, ended the period with 275 stores.

Usave, a low-cost, no-frills, limited assortment discount supermarket, ended the period with 410 stores. For the 12 months, Usave opened 30 new stores and closed 17 stores, eight of which have been permanently closed due to the social unrest, said Shoprite. Three are scheduled to re-open during the 2023 financial year.

LiquorShop sales grew 44.5% for the year, positively impacted by the launch of Liquorshop.co.za during the year. The LiquorShop business represents 7.2% of Supermarkets RSA’s sales and opened 42 new stores, including three President Hyper liquor stores, during the year to end the year with 570 stores.

Read: One of South Africa’s biggest retailers has major plans to create jobs and open new stores