Shoprite delivered strong growth in profit and sales in its half-year despite the impact of July 2021 unrest on its bottom line as its “relentless” focus on affordability won over customers.
The supermarket giant released its results for the six months to January 2, 2022, reporting that it grew its headline earnings per share by 25 percent to 519.3 cents.
Diluted headline earnings per share from continuing operations increased by 25.2 percent, while the board declared an interim dividend of 233 cents per share. This represented a year-on-year dividend per share growth of 22 percent. "The dividend has been declared out of income reserves," the retailer said.
The company said its balance sheet remained strong and reflected the group’s continued focus on its capital allocation program, which continued to deliver increased shareholder returns.
Shoprite's chief executive, Pieter Engelbrecht, said: "The execution strength demonstrated throughout our supermarket, furniture and franchise businesses during what can only be described as some of the most difficult times South Africa has seen for many years was unsurpassed.
He said the continued momentum and customer support demonstrated by all Shoprite’s supermarket brands was gratifying given its relentless focus on affordability.
“Our low-price promise continues to guide our daily decision making, evidenced by our 2.6 percent selling price inflation for the Supermarkets RSA segment for the six months. In addition to this, our 23.1 million customers who have joined the Shoprite and Checkers Xtra Savings Rewards Programme have saved R4.5bn during this six-month period alone,” Engelbrecht said.
The company’s sales increased by 10 percent to R91 billion, while its South African supermarket business increased by 11 percent.
According to Shoprite, despite two of its large format Checkers Hypers still closed due to the July 2021 civil unrest, all of its supermarket brands grew sales ahead of the market.
The company said Shoprite and Usave’s sales jumped by 7.3 percent, while Checkers and Checkers Hyper grew their sales by 11.4 percent. The Shoprite and Checkers LiqourShop businesses increased sales by 50 percent as alcohol sales restrictions eased, Engelbrecht said.
At the end of the reporting period, the group said 45 stores remained closed, seven of them would not re-open. The group opened 99 stores expanding its continuing operations to 2,933 stores.
"We’ve continued to strengthen our core supermarket business by opening new stores, updating existing stores, introducing new products, and bringing new trading formats to the market," Engelbrecht said.
Checkers, including Checkers Hyper, ended the period with 271 stores. Eight Checkers supermarkets were upgraded, and five new supermarkets were opened. The company also opened 12 PetShop Science stand-alone premium pet stores and one Little Me stand-alone baby store.
Checkers Sixty60, the group’s on-demand grocery delivery app has maintained its growth trajectory, expanding the store base from which it services Checkers customers to 266 stores (full-year 2021: 233 stores), the retailer said.
Shoprite continues to pick up market share from its retail competitors.
Last week, Woolworths released its interim results for the 26 weeks ended December 26, 2021, and reported that the group’s turnover declined by 1 percent to R39.2bn, and its headline earnings per share fell by 35.6 percent to 168.2 cents.
Another competitor Spar reported that for the 18 weeks to January 29, 2022, it increased sales by 5.8 percent to R45.5bn for the prior comparative period. The retailer said its Core Spar grocery wholesale business increased sales by 3.7 percent.
BUSINESS REPORT ONLINE