Shoprite Holdings gains market share as sales growth slows in South Africa supermarkets

Shoprite Holdings gained market share in the six months to December 31, 2023, but like-for-like sales were up only 1.9% and sales at its core South Africa supermarkets slowed in the last three months as prices fell.

The last three months are traditionally the strongest sales period for South African retailers because of the holiday season. South Africa's biggest supermarkets retailer said in an update on Monday that Shoprite group sales for the six months were up by 7.2% from a year earlier to R136.8 billion, while Supermarkets RSA, which contributed 83.4% of total sales, increased sales 7.1% to R115.3bn.

Supermarkets Non-RSA sales - Shoprite has 272 stores across seven African countries - increased 12.1% to R11.6bn. Other operating segments increased sales 3.5% to R9.9bn.

Like-for-like sales in South Africa, which excludes the impact of new stores opened and closed in the period, rose 1.9%, which the group directors said reflected an environment where prolonged selling price inflation transitioned into deflation during the key November to December 2023 trading period.

"In support of customer affordability, our selling price inflation continued to remain well below official food inflation, which measured 4.7% for the six months versus our internal selling price inflation which averaged 0.7% for the period," Shoprite's dirctors said.

Citing data from market research company NielsenIQ, they said the growth in the group's South African supermarkets business was 2.3 times the "rest of market" growth.

Supermarkets RSA sales increased by 6.5% in the second quarter to end-December 2023, a decline compared with the 7.1% growth in the first quarter.

Diluted headline earnings per share was expected to increase between 5.4% and 10.2% for the half year, to between 692.5 to 725.3 cents per share - the operations in Ghana, Malawi and furniture business in Angola and Mozambique were restated as discontinued operations in the comparative figures. Shoprite iplans to publish interim results on March 3, 2026.

Checkers, the group's stores that compete for the mid-to-higher income shoppers, saw sales rise 8.9%, supported by price inflation of 1.9%, and 1.1% inflation in its Checkers Hyper stores. Shoprite and Usave, with Shoprite LiquorShop, reported sales growth of 5.1%, with internal selling price deflation for Shoprite of -0.1% and Usave -0.7%. Shoprite Liquorshop increased sales 10.1%.

On-demand digital commerce sales via the Sixty60 platform continued to increase strongly by 34.6%.

Adjacent businesses reported sales growth of 70.9%, and within this, the developing store format, including Petshop Science, Uniq Clothing by Checkers, Checkers Outdoor and Little Me, increased sales by 71.2%.

Supermarkets RSA opened a net 262 stores over the past 12 months to 2 747 stores. Of these 50 were Shoprite, 42 Usave, 32 Checkers, four Checkers Hyper and 81 LiquorShop stores.The remaining 53 were new format stores: Petshop Science added 45 stores, Checkers Outdoor added five new stores, Uniq Clothing by Checkers added five new stores and Little Me closed two stores to a total 10 stores.

Shoprite's share price fell 0.92% to R263.97 on the JSE on Monday morning. The price was slightly higher at R283.35 a year before.

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