Global Courant
South Africa’s largest retailer, Shoprite, has spent more than R1 billion on diesel to run generators to help mitigate the effects of the shutdown.
In an operational update for the 52 weeks ending July 2, 2023, the group said it had increased its total sales of goods by 16.9% to approximately R215 billion.
The group also added a net 340 stores, bringing the total from continuing operations to 3,324 stores.
The group’s core business, Supermarkets RSA, saw sales growth of 17.8% (like-for-like 10.3%), contributing 80.8% to group sales.
The internal sales price inflation of the group also amounted to 10.1% (first half year 9.4%; second half year 10.8%).
Checkers and Checkers Hyper saw sales growth of 18.0%, while Shoprite and Usave saw growth of 15.6%.
LiquorShop sales were up 30.8%, while sales grew 35.6% in the first half – up from the previous year’s closures.
Non-RSA supermarkets saw their sales increase by 16.4% and contributed 9.1% to the group’s sales (in fringe terms).
The group’s furniture business reported a sales increase of 5.1% (2.0% like-for-like) for the period, while the group’s other operating segments saw an increase of 13.3% over the period.
Despite growing customer numbers and increasing market share, the group said several issues still affected the period.
As with other major retailers in South Africa, increased load shedding came at a significant cost.
“The cost of diesel to power generators during the shutdown of our supermarkets RSA retail base was R1.3 billion. It is important to note that these costs became significant in higher stages of load shedding, which occurred from September 2022,” the group said.
In addition, the group said it remains resolute in offering lower prices and value to its customers, which will result in the group’s full-year gross margin being lower than reported last year (2022 restated: 24.5%). However, this decrease is expected to be lower than the gross margin reported in the group’s interim results for 2023.
“Other less significant but still notable expenses include the impact of a full year of benefits paid to Shoprite Group employees from the Shoprite Employee Trust and the onboarding of the 4,480 employees from January this year, as part of the aforementioned stores acquired from Massmart,” it added.
It said it would publish its year-end results for the period ending July 2, 2023 on September 5, 2023.
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