South Africa-based Shoprite has reported total sales growth (including Supermarkets RSA LiquorShop) of 4.7%, to ZAR83.4 bn (US$5.8 bn). Excluding the effect of the liquor stores, which were impacted by COVID-19 nationwide lockdown regulations, sales rose by 6.3%.
Results show improving performance during the half
In its home market Shoprite reported sales growth of 5.6% in the half (including the LiquorShop banner), while growth was 7.8% excluding it. The results showed an improvement for the retailer’s second quarter, which benefited from a lessening in the impact of the lockdown regulations. This was highlighted by Shoprite, who reported sales declined by 21.8% at its LiquorShop banner in the half. However, this was skewed towards the first quarter, when the business was closed for 60 days, while it was only shuttered for 19 days in the second.
Checkers brand leads growth in South Africa…
Excluding the LiquorShop banner, Shoprite’s supermarkets achieved sales growth of 7.8% or 5.7% in like-for-like terms. Shoprite said its internal selling price inflation stood at 4.3% for the half, with the second quarter’s 4.2% lower than the 4.4% recorded in the first quarter. The retailer said its Checkers and Checkers Hyper brands drove growth, with sales up by 11.1% during the half. Shoprite will be pleased with the performance of its Checkers branded stores given the investment it has put into them in the last year or so to help it compete with Woolworths and Pick n Pay.
However, the retailer reported its more value-focused banners, Shoprite and Usave, saw sales growth of ‘just’ 5.6%. The retailer’s total sales performance was boosted by the opening of a net new 45 stores during the half. Shoprite said it had generated COVID-19-related costs of approximately ZAR180m (US$12.2m), which it had spent on sanitisation and protective equipment measures for staff and shoppers.
…While operations outside South Africa remained challenged
Its stores outside South Africa continued to face challenges, with sales, in Rand terms, down by 8.4% to ZAR8.6 bn (US$594.2m). In constant currency terms sales rose by 0.9%, with Shoprite noting ‘pre-existing challenges from a macro-economic and consumer affordability perspective [being] exacerbated by COVID-19 and its associated lockdown restrictions’. The retailer said it had concluded the sale of its operations in Nigeria, but was waiting on approval from the Nigerian Federal Competition and Consumer Protection Commission (FCCPC).
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