R1.5 million a day relief for South Africa’s biggest retailer

The easing of load shedding so far in 2024 has cut Shoprite’s diesel bill by about R1.5 million a day, adding to the boost in revenue and sales it has experienced in the last year.

For the 52 weeks ended 30 June 2024, the cost of diesel to power generators during load shedding across its Supermarkets RSA store base amounted to R754 million.

This was a drop from R500 million in the first half of the year (July to December) when load shedding was in full swing to R254 million in the second half (January to June) when load shedding was eased significantly.

Load shedding has been suspended since the end of March.

At R754 million, the group has cut its diesel bill by 42% from the R1.3 billion spent in FY23—though it is still higher than the R226 million spent in 2022.

Overall, this averages out to a saving of about R1.5 million a day on diesel thanks to the load shedding break.

The group said, “This decrease in diesel costs should be considered in light of a commensurate increase in electricity usage.”

“As a result, we anticipate the percentage increase in the group’s water and electricity expense for the year should be in the mid- to low single digits.”

For the period, the group’s total merchandise sales increased by 12.0% to roughly R240.7 billion from continuing operations, which includes the impact of hyperinflation in Ghana.

A net of 292 stores opened during the period, including a net of 73 OK Franchise stores. This brought the total to 3,639 stores from continuing operations.

The group’s core business, Supermarkets RSA, saw sales growth of 12.3%, contributing 81.0% to group sales. This follows a sales increase of 17.8% in the prior year.

“Unlike our first half period sales growth, which included the stores acquired from Massmart Holdings Ltd and reported against a base in which they were not included, our second half sales growth of 10.1% was achieved with the acquired stores—51 Shoprite, one Usave and 40 Shoprite LiquorShop stores—included in our prior year base.”

Checkers and Checkers Hyper reported sales growth of 12.3%, with online sales from Checkers Sixty60’s on-demand platform increasing by 58.1%.

Shoprite and Usave reported sales growth of 10.7%, while LiquorShop sales increased by 20%.

Supermarkets RSA opened a net 201 stores (2023: 301 stores, including the stores acquired from Walmart) during the year to a total of 2,322 stores.

Of the new openings, 20 were Shoprtie, 22 were Usave, 25 were Checkers, and 71 were LiquorShop stores.

The remaining 63 were new-format stores, with Petshop Science adding 33 new stores to a total of 86 stores, Checkers Outdoor adding 14 new stores to a total of 22 stores, UNIQ Clothing adding 13 stores to a total of 22 stores, and Little Me opening three new stores to a total of 12 stores.

The group’s non-RSA supermarket sales increased by 6.1%, excluding hyperinflation and contributed 8.6% to group sales.

Supermarkets Non-RSA’s store base increased by a net 15 stores to a total of 266 stores operating in nine countries.

The group’s furniture segment, contributing 3.0% to group sales, saw a 2.3% increase in sales for the year (like-for-like sales increased by 2.0%). The segment’s store base decreased by a net of four stores to end the year with 430 stores.

The group’s other operating segments, comprising OK Franchise, Transpharm, Medirite, Red Star Wholesale Catering Services and Computicket, saw sales growth of 21.1% for the period, representing 7.4% of group sales.

Sales at the group’s OK Franchise business increased by 23.8%, with 73 stores opened to a total of 608 stores at the end of the year.

From the beginning to the end of the year, the group opened seven Medirite Plus standalone drug stores, 13 of which were standalone stores, and 126 other Medirites were in-store pharmacies.

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