Shoprite juggernaut steams on

Shoprite reported strong results for its 2024 financial year, which saw the retailer’s revenue up 12%.

Shoprite – which owns brands like Checkers and Usave – reported its results for the 52 weeks through June 2024, which revealed a strong performance for the group.

Revenue was up 12.1%, which saw trading profit grow by 11.7% to R13.40 billion. However, the retailer’s profit for the year only grew by 4% to R6.22 billion.

The largest part of this growth was driven by the group’s Supermarkets RSA division, which saw its trading profit grow by 11% in the period.

Checkers and Checkers Hyper saw 12.3% sales growth, opened 26 new stores and underwent 12 store upgrades. 

Excluding Shoprite and Checkers LiquorShop businesses, which increased sales by 20.0%, Shoprite and Usave increased sales from a base of R90.0 billion last year by 10.7%. This equates to an additional spend of R9.6 billion in stores this year. 

Individually, Shoprite increased sales from a substantial rand value by 10.3%, and Usave increased sales by 13.2%. 

The retailer’s furniture division also saw massive growth of 82% to R195 million due to the combination of an improved gross margin and increases in finance and other income. 

It was revealed earlier this week that Shoprite will be selling its furniture business to Pepkor for about R3 billion.

Notably, Shoprite also took a significant forex hit in its 2024 financial year, recording exchange rate losses of R14 million, compared to gains of R384 million the previous year.

This is due to its Supermarkets Non-RSA division, which operates in nine countries with 266 stores. 

This division’s continuing operations increased sales in rand terms, excluding hyperinflation by 6.1% and by 22.1% in constant currency. 

However, sales growth in rand terms was negatively impacted by an average devaluation of 25.8% of the Zambia kwacha, 2.9% of the Ghana cedi and 60.1% of the Angola kwanza against the rand. 

The segment contributed 8.6% to group sales, but Shoprite estimated that internal food inflation for the regions averaged 9.3% for the period. 

“It is my privilege to present results that aptly reflect a year in which we remained focused on our business and what we stand for – being best-priced, in-stock, solution-driven and customer-led,” said CEO Pieter Engelbrecht. 

“Our 12.0% increase in Group sales equates to our core South African supermarkets customers spending R21.4 billion more with us this year.”

“During a time when customers are incredibly pressured, this is the greatest reward for our efforts which come as a result of best-in-class execution, innovation and an unwavering dedication to serve.” 

He explained that growth of this nature, in a highly competitive market and from a high base, can only be achieved as a result of across-the-board commitment. 

Shoprite’s strong results encouraged the board to increase its dividend to shareholders by 7.4% this year to 712 cents per share.