THE TILLS ARE RINGING: Shoprite increased its turnover to R141 billion for the year to the end of June. Among the group’s smaller divisions, LiquorShop achieved the highest sales growth of 20.4%, or R4.8bn. Picture: Simphiwe Mbokazi
THE TILLS ARE RINGING: Shoprite increased its turnover to R141 billion for the year to the end of June. Among the group’s smaller divisions, LiquorShop achieved the highest sales growth of 20.4%, or R4.8bn. Picture: Simphiwe Mbokazi
JOHANNESBURG - Shoprite shares rose nearly 8% on the JSE yesterday after the group reported that its local operations boosted its profits against subdued spending by consumers.

Africa’s biggest food retailer said its turnover for the year to June surged to R141billion with LiquorShop achieving the highest sales growth of R4.8bn.

Chief executive Pieter Engelbrecht said the group compounded high levels of unemployment, consumer indebtedness and shrinking disposable income to strengthen its stranglehold on the local retail market, opening 1001 supermarket stores in the country and stamping its footprint in Africa.

Engelbrecht said the company managed to grow its businesses against the consumer indebtedness and the shrinking in disposable income.

“While developing countries beyond Africa are under investigation, the group will continue to enlarge its footprint on the continent through expansion in the current countries it operates in as well as new territories altogether,” Engelbrecht said.

Shoprite currently trades in 15 countries with 2689 stores.

The group said it created more than 6000 job opportunities during the period with the youth being the main beneficiary.

It said its total staff compliment now stood at 143802.

Engelbrecht added the South African supermarket operation, which represents 72percent of total sales and 79percent of trading profit, grew 8percent in a tough operating environment.

He said diluted headline earnings per share also rose 11.9percent to 1007.4c a share.

It declared a dividend of 504c per ordinary share, up 11.5percent over the 452c of the corresponding period last year.

Shoprite’s market share increased to 31.9percent locally and it stated that internal food inflation averaged 5.9percent compared with official food inflation of 10percent. “We have shielded customers from R1.8bn of potential additional expenses, had our prices tracked inflation,” he said.

Bright Khumalo, an analyst at Vestact, said Shoprite released a solid set of numbers considering the current tough trading environment in the food sector and the South African economy falling into a technical recession last quarter. Diversification across many geographies came in handy in the results.

Khumalo said the company still controlled the local market share at 31.9percent.

“Growth on a like-for-like basis still came in positive and strong at 5.8percent - (and this was) off a high base.

"The internal food inflation is almost half of the basket-food inflation and shows this company is doing something right and putting R1.8bn back into customers’ pockets,” Khumalo added.

Shoprite shares closed 8.01percent higher at R217.11.

- BUSINESS REPORT