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Sales at South African retail giant Shoprite soared 16.8% to R106.3 billion during the six months to the end of January 2023, helped by a record Black Friday and festive shopping season, the company said in a trading update on Tuesday.
Excluding sales for the South African LiqourShop, the retailer recorded sales of R99 billion.
South Africa’s largest grocery retailer, whose core customer is positioned on the lower end of the income bracket, said it has had 46 months of uninterrupted market share gains, at the same time when consumers had been feeling the pinch of rampant inflation and a rise in the cost of living.
For its South African operations, which contribute 80% to group sales, the retailer reported sales growth of 17.5%, compared to 11% growth in its previous first-half ending January 2022.
Sales at its Checkers and Checkers Hyper stores grew by 16.9%, while Shoprite and Usave reported 15.1% growth. Sales at its South African LiquorShop stores increased by 35.6%, it said.
Its furniture division, which includes brands such as OK Furniture and House & Home, saw sales growth of 8.6% to R7.3 billion.
Despite its record Black Friday and festive season sales, Shoprite said steep fuel prices, which have climbed 56% in the last year, weighed on its supply chain operations.
“The impact of the approximate 56% year-on-year increase in fuel price on our supply chain operations will result in the segment reporting a marginally lower gross margin for the period,” Shoprite said .
The retailer added that price investments in a bid to counter inflationary pressures on customers, which led to customers saving R7 billion through its Shoprite and Checkers Xtra Savings programmes, will also contribute to lower gross margins.
It also spent an additional R560 million on diesel to operate generators across its South African stores, where record load shedding continues to threaten business operations across the country.
Sales in stores in its rest of the Africa regions, which make up 9% of all sales, were up 17.5%, but in constant currency, non-South African stores increased sales by 6.9%.
The retailer ended the period with 227 stores, having closed three in DRC during that time.
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