CAPE TOWN - Shoprite chief executive Pieter Engelbrecht said on Tuesday that the company has been to "war" over the last six months.
The low-cost retailer has been hit hard by a very weak economy and a number of other issues, including the new sugar tax, the massive listeriosis outbreak and the VAT increase.
Engelbrecht said: “An unprecedented VAT increase, record fuel prices, and sugar tax, to name a few, provided a challenging environment for the group and put our customers under undue financial pressure.”
The company also said that they lost 150 days of trading due to service delivery protests.
A staggering 489 armed robberies were tallied for the July 2017 to June 2018 period.
This translated to approximately 1.4 robberies a day.
Shoprite's share price fell by more than 4 percent on Tuesday as the market reacted to the news that the company experienced decreased earnings by 3.8 percent.
South Africa’s gross domestic product grew 1.3 percent in 2017 and fell 2.2 percent in the first quarter of 2018, while unemployment remained high at 27.2 percent.
Despite these testing trading conditions, Engelbrecht said the group had managed to increase total turnover by 3.1 percent to R145.3bn - with positive volume growth of 2.7 percent combined with a 3.3 percent increase in customer numbers, as well as local market share gains - continuing to reflect a strong underlying performance.
The group said its core South African supermarket operations increased turnover by 5.7 percent, despite experiencing overall deflation in selling prices for six out of 12 months during the year.
The company did release some good news this month. Last week Shoprite said that they are continuing to make sure that financially-pressed customers could afford to eat, even if they had just R5 in their pockets.
Shoprite said that they were very proud of the more than 1 000 products available in Shoprite stores for R5 or less.
The grocer further added that over 13 000 products are selling at lower prices than last year.
"We continue to keep prices as low as possible with our unwavering commitment to delivering the lowest prices on food and household essentials every day."
For less than R5, customers are able to buy a range of bakery, deli, fruit, and veg as well as grocery products.
A chicken hotdog, a fried egg & tomato sandwich or soup & igwinya (vetkoek) are all available for under R5 at Shoprite delis.
Shoprite subsidises its 600g in-house bakery bread which costs just R4.99, the same price as in April 2016 when the retailer first started its bread subsidy.
Since then it has sold 110 million loaves of bread, subsidised to the tune of R67m, while absorbing any input cost increases.
In the last year alone, the company has subsidised staple products at a cost of R190m.
-BUSINESS REPORT ONLINE