Shares in Shoprite leapt 6 percent on the JSE on Monday after it reported that its sales soared in the three months to September. Photo: Reuters

JOHANNESBURG – Shares in Shoprite, Africa’s retail giant, leapt 6 percent on the JSE yesterday after it reported that its sales soared in the three months to September and as shareholders voted for Christo Wiese to stay on as non-executive director for another year.

The share traded at R145.50 at 9.58am, before ending the day 1.5 percent down at R135.15. Shoprite said sales from its South African supermarkets, its core business, had jumped by 10.3 percent in September as it gained market share at Usave after recovering from supply chain challenges in the same period last year. 

Group turnover increased 7.3 percent and selling price inflation measured 3 percent, the company said. 

The retailer said its supermarket’s footprint had grown with the opening of 15 new stores, including eight Usave stores, four Shoprite stores and three Checkers stores.  

The Liquorshop brand added a net 10 stores to reach a milestone 500 stores, OK Franchise grew its base by a net 10 stores in the quarter, while the company relaunched Johannesburg’s Sandton City Checkers Hyper in late September. “This store is a flagship for the Checkers FreshX format and the store re-opening is surpassing our expectations,” said the group.

Shoprite launched the Xtra Savings Rewards Programme in all Checkers stores in a bid to catch up with its peers, including Pick n Pay, which has run loyalty programmes for years. 

The company said the Xtra Savings Rewards had attracted more than a million customers after just one week.

Despite the robust performance in South Africa, Shoprite said it continued to experience a tough time in its business on the rest of the African continent.

Shoprite hinted that it would exit the African market if necessary, as it reported a 4.9 percent fall from non-South African supermarkets in the quarter under review.

“Management is assessing the performance of these supermarkets' non-South African segment, with specific reference to the group's return on capital invested in Africa,” said Shoprite. 

“Currency devaluations have continued and our Nigerian business had a particularly challenging quarter marred by xenophobic attacks,” said Shoprite.

In terms of highlights, the group said its other operating segments, which include the OK Franchise, Computicket, MediRite pharmacies and Checkers Food Services, had reported a 6.4 percent increase in sales. The OK Franchise division reported an 8.6 percent growth in sales.

Damon Buss, an equity analyst at Electus Fund Managers, said yesterday that Shoprite had posted good numbers, although the numbers were off a low base.

Buss said Angola, Nigeria, Mozambique and Zambia are key markets for Shoprite outside of their South African operations, each of these countries had significant macroeconomic challenges currently.

“It is highly unlikely for the company to sell its assets on the rest of the African continent. I don't think they will get value if they sell now. They are likely to substantially curtail their capital investment on the rest of the continent, given the current challenges,” Buss said.

Michael Treherne, a portfolio manager at Vestact Asset Management, said growing revenue at 10 percent for the South African segment was very good going in a low inflation environment.

“This carries on from the green shoots that we saw at their last set of numbers. The operation update sets a positive tone for the stock going forward,” said Treherne.

Shoprite held an annual general meeting  yesterday where Wiese told investors that board changes were being planned. 

BUSINESS REPORT