Retail

Shoprite versus Woolworths Food

Shoprite and Woolworths Food’s latest financial results show that Shoprite performed stronger in revenue growth, but Woolworths Food’s profit growth was superior.

Shoprite released its interim results on 5 March 2024, which revealed that it increased sales by 13.9% to R121.1 billion.

Shoprite also managed to increase its gross profit by 14.85% from the previous year.

Shoprite – which owns brands such as Checkers, House & Home, OK, Uniq and Computicket – outperformed the South African retail market.

Checkers and Checkers Hyper increased sales by 13.7%, while Checkers Sixty60 increased sales by 63.1% over the six-month reporting period.

Trading profit increased by 10.7%, resulting in a trading margin of 5.5%, just below H1 2023’s 5.7%.

Shoprite opened 215 stores, expanding its continuing operations footprint to 3,543 stores. Total operations capital expenditure to continuing operations’ sales for the period was 3.1%.

Woolworths Food, in comparison, reported interim revenue growth of 8.22% and an increase in gross profit of 11.45%.

However, its gross profit margin was 24.6%, and its profit before tax margin was 6.44%. This was better than Shoprite’s gross profit margin of 23.6% and its profit before tax margin of 4.16%.

The two retailers have different strategies, with Woolworths Food only targeting higher-income households.

Shoprite serves a broader spectrum of the market, including lower-income households with its Shoprite stores and high-income households with its Checkers brand.

It makes sense that Woolworths Food can be more profitable at the expense of greater growth.

Shoprite versus Woolworths Food

The table below compares Shoprite and Woolworths in terms of core metrics. Showing how Shoprite performs stronger in terms of growth, but Woolworths Food is more profitable.

MetricWoolworths FoodShoprite
Revenue growth8.22%13.72%
Gross profit growth  11.45%14.85%
Profit before tax growth11.76%9.60%
Gross profit margin24.55%23.55%
Profit before tax margin6.44%4.16%

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