Shoprite makes R5 billion every week

Shoprite CEO Pieter Engelbrecht recently revealed that the company makes around R4.67 billion in revenue every week – significantly more than any other grocery retailer in South Africa.

“I joined Shoprite in ‘97, and in those days, it took 19 years to do R10 billion in revenue. Today, we do R10 billion in revenue every 15 days,” Engelbrecht said at the company’s latest interim results presentation.

In 2023, Shoprite made R219.53 billion in revenue and R5.9 billion in profit. This means the retailer makes around R600 million a day. 

Shoprite – which owns brands such as Checkers, House & Home, OK, Uniq and Computicket – is the largest supermarket retailer in South Africa, with a market cap of R158.69 billion.

This impressive growth comes despite a very constrained operating environment in South Africa.

For example, in its latest results for the six months through December 2023, Shoprite reported spending around R500 million on diesel to operate generators during load-shedding.

In addition, South Africa’s logistics industry – one of the most crucial aspects of a successful retail business – is in crisis.

However, despite these challenges, Shoprite has delivered impressive results year after year.

For example, in its latest results, Shoprite said it is responding to low South African production investment, coupled with the country falling out of favour with international companies, by ensuring it keeps more stock.

Engelbrecht said it took Shoprite about 10 weeks to get the right product in stores ahead of Black Friday sales.

“This gives you an idea of how constrained the supply chain is,” he said. “There is very little investment in production capacity amongst the manufacturers in South Africa, and the multinationals have completely stopped.”

This is putting pressure on local retailers. In the last three years, Shoprite has kept stock at stores higher than 98% while also carrying much more in its distribution centres.

He added that the retailer is building three new distribution centres.

Engelbrecht said keeping shelves full of the items consumers want to buy is not only helping Shoprite sell more, it’s also building customer loyalty.

This is because it avoids frustrating already embattled shoppers by not being able to get what they need when they need it – as well as the additional fuel costs of having to return for some products.