Shoprite shines after record Black Friday – amid R560m diesel spending hit

Shoprite had to spend more than half a billon on diesel for generators in first half

• Shoprite has delivered double-digit first-half sales growth.
• But SA’s largest grocer had to fork out half a billion on diesel because of load shedding.
• The company reported 46 months of uninterrupted market share gains.
• For more financial news, go to the News24 Business front page.

A record Black Friday and festive season helped Shoprite deliver double-digit first-half sales growth as it spent more than half a billion rand to keep the lights on during one of SA’s worst ever periods of load shedding.

SA’s largest grocery retailer said on Tuesday its local supermarkets division delivered sales growth of 17.5% for the six months to January 1, adding that on a like-for-like basis it rose by more than 11%.  This segment, which accounts for just over 80% of group sales, was also able to raise selling prices by 9.4%.

“The growth in sales reflects a record Black Friday and festive season, underpinning 46 months of uninterrupted market share gains,” it said.

Across the Shoprite group the total sale of merchandise rose 16.8% to about R106.3 billion.

But this kind of growth also came at a price with the company saying it had to fork out an additional R560 million during the half on diesel to operate generators across its South African supermarkets store base in order to “trade uninterrupted during load shedding stages five and six”.

The market cheered the update with the retailer’s shares rising more than 2% to R249.82 on Tuesday morning.

Click here for more info about Shoprite’s shares and other info

Internal price inflation increased 9.4%, which Shoprite said reflected its “product mix exposure to commodities, where selling price inflation has been notably higher”.

The retailer’s top brands all delivered double digit increases with Supermarkets RSA LiquorShop sales delivering a standout performance with a 35.6% increase in sales.

Checkers and Checkers Hyper reported sales growth of 16.9%, while Shoprite and Usave reported sales growth of 15.1%.

Shoprite’s rest of Africa stores also increased sales 17.5%, contributing 9.4% to group sales. In constant currency these stores increased sales by 6.9%.

The company’s furniture division, which included OK Furniture, OK Power Express and House & Home, reported an 8.6% increase in sales, with sales increasing 5% on a like for like basis.

Shoprite’s “other” operating segments, including among them Transpharm, Medirite Pharmacies and Checkers Food Services, among others, reported sales growth of 12.5%.