How much you would have if you invested R1,000 in Woolworths, Shoprite, Pick n Pay and SPAR twenty years ago

South Africa’s four largest food retailers have seen their share prices grow over the last two decades, but Shoprite is still the clear winner.

R1,000 invested in Shoprite, which also owns Checkers, twenty years ago would now be worth R27,638.10 per share.

Shoprite is South Africa’s largest retailer and recorded close to R250 billion in revenue for the 52 weeks ending 30 June 2024.

Its core South African supermarket customers spent R21.4 billion more than the previous year.

Checkers, Checkers Hyper and Sixty60 also saw strong growth over the last year.

The group has seen monumental growth over the last few years.

Shoprite CEO Pieter Engelbrecht previously said: “I joined Shoprite in 1997, and in those days, it took 19 years to earn R10 billion in revenue. Today, we earn R10 billion in revenue every 15 days.”

Woolworths is the second best-performing retailer on the list, with R1,000 invested in 2004 now worth just under R8,000.

Known as the luxury retailer of the four major retailers, Woolworths has a loyal customer base.

However, current times have not been easy for the group, with weak economies in South Africa and Australia hurting its results for 30 June 2024.

Although group turnover increased by 6.5% in the period, operating profit declined from R6.6 billion to R6.0 billion, and headline earnings per share dropped 30% from 514.7 cents per share to 364.2.

The group said that its South African operations were hit by congestion at the ports for most of the period and the impact of taxi strikes and Avian flu in the first half of the financial year.

The higher interest rate environment damaged the Australian business, as high living costs affected consumer confidence, footfall, and spending.

In third place is SPAR, whose share price has grown by roughly 575% over the last 20 years.

R1,000 in 2004 would now be worth R6,765.20.

Notably, the company was listed on the JSE on 19 October 2024 – nearly exactly 20 years ago. Prior to that, it was owned by food and beverage giant Tiger Brands.

SPAR has faced several headwinds in recent times, including a botched SAP installation at its distribution centre, but there is hope that an improvement is around the corner.

In a recent trading update for the 47 weeks to 23 August 2024, the group said that turnover from continuing operations increased by 4.1%.

In Southern Africa, total sales jumped by 3.5%, with varied performances across business units.

“Our focus remains on returning the SA business to a 3% operating profit margin by the end of the 2026 financial year, and we are in the process of reviewing our target operating model with a view to maximising value,” said CEO Angelo Swartz.

The group also sold its Polish Business to retailer Specjal as part of its turnaround plan. The sale removed a loss-making business from its balance sheet and allowed it to focus on its core business in South Africa.

However, it will need to spend R2.7 billion to recapitalise the Polish company, which it sells for just R185 million.

The former owner of the biggest retailer in South Africa, Pick n Pay, has come last in the group’s toughest period.

Pick n Pay’s share price has only grown 60.69% over the last two decades, meaning that R1,000 in 2004 would now be worth R1 606.90

When accounting for inflation, R1,000 would be worth R2,892.77 today, meaning Pick n Pay’s share price has failed to keep up with inflation.

That said, Pick n Pay’s recent poor performance has caused much damage to its share price.

In the group’s financial results for the year ended 25 February 2024, the core Pick n Pay grocery segment triggered an R2.8 billion non-cash impairment on the assets of Pick n Pay company-owned stores, which resulted in an overall after-tax loss of R3.2 billion.

The current financial year has gotten off to a worse start, with the group expecting earnings per share and headline earnings per share to decrease by over 20% in the 26 weeks ended 25 August 2024.

CEO Sean Summers warned that the situation may have to get worse before it gets better.

On the positive side, the group successfully concluded a R4 billion rights offer to strengthen its balance sheet.

The group is now focusing on the second step of its recapitalisation programme, a planned IPO of Boxer – one of its better-performing businesses.

The performance of the companies’ share prices can be found below:

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