Independent Online

Monday, August 8, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Shoprite share price up after as supermarket sales hold up in weak trading environment

An employee restocks shelves with food products inside a Shoprite Holdings store in Cape Town, South Africa.File photo

An employee restocks shelves with food products inside a Shoprite Holdings store in Cape Town, South Africa.File photo

Published Jul 27, 2022

Share

Shoprite Group’s share price gained 4.13 percent yesterday after it said total merchandise sales increased by 9.6 percent to about R184.1 billion in the 52 weeks to July 3.

The largest supermarket group on the continent, which recently joined a growing number of companies hoping to provide bank services to small and medium-sized businesses through a new division, Next Capital, said 2022 sales would have increased by 11.9 percent on a 52-week basis taking into account the additional week included as part of the prior year's 53-week reporting period.

Story continues below Advertisement

The share price at R218.01 early yesterday afternoon represented a 39.5 percent spike in the price over 12 months, a gain that was not out of line with the relatively strong operational update released yesterday.

The core business in the group, Supermarkets RSA, contributing 80 percent to group sales, grew sales 10.1 percent (like-for-like 8.5 percent). On a 52-week basis, sales increased by 12.6 percent.

The Supermarkets RSA LiquorShop business's sales increased by 44.5 percent.

The Supermarkets RSA LiquorShop business had to close for 48 days over the 12 months, compared with 144 days in the prior year.

The local supermarkets segment's sales growth was in spite the July 2021 civil unrest that impacted 189 stores (135 supermarkets and 54 LiquorShops) and resulted in other stores being closed for precautionary reasons.

At the end of the period 31 stores remained closed, nine of which were permanently closed. The remaining 22 stores were scheduled to reopen during the 2023 financial year.

Story continues below Advertisement

The group added 127 stores to its corporate store base in the 52-week period to total 2 476 stores from continuing operations.

Shoprite’s furniture segment, contributing 3.7 percent to group sales, reported a 1.4 percent decline in sales for the year – like-for-like sales increased by 0.3 percent.

Meanwhile, Rival Pick n Pick said yesterday its group sales had increased 10.7 percent for the first 18 weeks of its 2023 financial year to July 3.

Story continues below Advertisement

Its South Africa segment grew sales by 10.5 percent, with like-for-like sales growth of 8.3 percent.

Pick n Pay’s online sales for the period, including scheduled delivery, click and collect, and asap!, its on-demand online service, grew 97.3 percent.

Pick n Pay said it was making good progress on its target to improve efficiency and reduce costs by R3 billion over the next three years.

Story continues below Advertisement

Pick n pay said it expected the consumer environment to remain challenging, as a result of globally rising inflation and interest rates, and the ongoing impact of severe load-shedding locally.

[email protected]

BUSINESS REPORT

Share