Shoprite, Africa\u2019s largest supermarket retailer, is the best-performing JSE-listed food retailer among South Africa’s most popular in 2024, even though its year-to-date investment is still negative.<\/p>\n\n\n\n
Between 1 January and 3 May 2024, Spar, Woolworths, and Pick n Pay saw their share prices drop by double-digit percentages.<\/p>\n\n\n\n
Retailers, including those mentioned below, have noted that ongoing inflationary and other cost-of-living pressures and domestic service issues have strained their businesses. <\/p>\n\n\n\n
Spar was particularly hard hit, slumping 14.64% year-to-date (YTD) after the retail group’s profitability over the last year has been severely hampered by a botched implementation of SAP<\/a> at its KwaZulu-Natal distribution centre.<\/p>\n\n\n\n Additionally, Spar has R10 billion of debt \u2014 largely euro-denominated \u2014 with about R250 million due this year.<\/p>\n\n\n\n In November, the company, which supports a network of independent retailers who trade under its brand through its warehousing and distribution business, halted its dividend and reported a 47% drop in full-year operating profit.<\/p>\n\n\n\n The decline in earnings has seen Spar\u2019s shares slump as much as 21% this year, compared with a 15% gain on the six-member grocery store index.<\/p>\n\n\n\n Woolworths has also seen its earnings and profits drop as South African and Australian consumers battle to find extra cash.<\/p>\n\n\n\n Although the group\u2019s financials for the first half of the 2024 financial year (H1 2024) are not comparable to the prior period (H1 2023) \u2013 as David Jones was included in H1 2023 \u2013 the group\u2019s results were still heavily impacted by interest rate increases and elevated living costs.<\/p>\n\n\n\n In South Africa, business operations were severely impacted by high levels of load shedding, port delays and the impact of Avian flu on key foods.<\/p>\n\n\n\n Overall, when looking at continuing operations, earnings per share and headline earnings per share decreased by 7.4% and 7.5%, respectively.<\/p>\n\n\n\n \u201cThe outlook for the rest of the financial year is expected to remain challenging. Whilst inflation is expected to ease gradually, interest rates across both geographies are likely to remain elevated, placing continued pressure on consumer disposable income,\u201d the group said<\/a>.<\/p>\n\n\n\n However, Woolworths added that it remains confident in its ability to deliver against its strategies and is well-placed to benefit from any cyclical consumer recovery.<\/p>\n\n\n\n Despite this, Woolworths\u2019s YTD performance slumped 15.18%.<\/p>\n\n\n\n