Over 30 million customers for South Africa’s largest retailer

Shoprite, South Africa’s largest retailer, has seen its profits increase. The group now sees roughly half of the country’s population step through its doors.

Shoprite saw a 12.0% increase in its group sales, with its core South African supermarket customers spending R21.4 billion more at the group during the 52 weeks that ended 30 June 2024.

Group CEO Pieter Engelbrecht said that the group’s total customers in South Africa totalled over 30 million.

Engelbrecht added that Checkers and Checkers Hyper’s 12.3% sales growth, with 26 new stores opened and 12 store upgrades.

In terms of smaller, adjacent stand-alone stores, 65 were opened in the period:

• 34 Petshop Science premium pet stores to total 86;
• Three Little Me baby stores to total 12;
• 14 UNIQ clothing by Checkers stores to total 22; and
• 14 Checkers Outdoor stores to total 22.

Checkers Sixty60 also increased sales by 58.1% (2023: 81.5%), with the store base from which it services customers increasing to 539 stores (2023: 466 stores).

Shoprite and Usave collectively increased sales by 10.7% from a base of R90.0 billion. Shoprite increased sales by 10.3%, while Usave saw a 13.2%

Shoprite and Checkers LiquorShop business increased sales by 20.0%.

“Usave, our perennial achiever, in particular, is to be commended,” said Engelbrecht.

“Despite experiencing the lowest sell inflation of all our grocery businesses (2.3% selling price inflation at its lowest in May 2024) and its customers being the most stretched, Usave increased sales ahead of our other top performing grocery businesses, which in themselves all grew ahead of the market.”

“Whilst Usave reports from a substantially lower rand value base than Shoprite, its growth, from an established store base in a highly competitive market, is a testament to the role it plays in the communities it serves and validates both its positioning as well as our core supermarkets business segmented approach.”

The group also generated R23.6 billion in cash from operations over the year, and its approach to capital allocation allowed it to invest R7.8 billion in new stores, store upgrades, IT improvements, and e-commerce.

The group also increased its dividend by 7.4% for the year, with R3.9 billion returned to shareholders.

The group’s key financial metrics can be found below:

Looking ahead

Looking forward, the group is making two structural changes to the business.

The group is firstly selling its furniture business, including the OK Furniture and House & Home brands and excluding Angola and Mozambique operations, to Pepkor Holdings Ltd (Pepkor).

“With respect to our furniture business, we found ourselves at a crossroads with the business’s future growth and profitability hamstrung by the requirement of a level of investment that would have resulted in us re-directing capital and project management resources away from that currently dedicated to our food retail operations,” said Engelbrecht.

“We believe the best outcome for OK Furniture and House & Home is for the business to operate in an environment where its required infrastructure and credit management expertise exists, thus allowing us to focus our resources on what we do best.”

Moreover, the group is also in advanced discussions to purchase the remaining 50% shareholding in its last-mile logistics provider, Pingo Delivery, and will provide an update in due course

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