In a remarkable display of resilience, Shoprite, South Africa's leading retailer, has weathered the storm of load shedding, absorbing a hefty R500 million bill to keep its operations running smoothly. Despite this substantial expenditure, the retail juggernaut has reported soaring sales and profits, reaffirming its dominance in the market.
The latest financial results for the six months ending on December 31, 2023 (H1 2024), unveiled by CEO Pieter Engelbrecht, underscore the company's robust performance amidst challenging conditions. Shoprite witnessed a staggering 14% increase in sales, amounting to R12.4 billion, within its core business segment, Supermarkets RSA. This growth trajectory builds on the momentum of a remarkable 17.5% surge in sales from the preceding period.
Profitability remained robust for the period, with a 4.2% jump in profits to R3.4 billion from R3.27 billion in H1 2023. Notably, Shoprite has sustained a streak of uninterrupted market share gains in its core business, spanning an impressive 58 months.
Checkers and Checkers Hyper, key subsidiaries of Shoprite, witnessed substantial sales growth of 13.7%, while Checkers Sixty60, a burgeoning e-commerce platform, showcased exceptional growth with a remarkable 63.1% increase in sales. The expansion of Checkers Sixty60 was evident with a notable rise in store numbers from 394 sites in H1 2023 to 505 stores in H1 2024.
Shoprite's strategic acquisitions also contributed to its robust sales performance. With the acquisition of 51 stores from Massmart, Shoprite and Usave recorded a sales growth of 13.1%. Additionally, the LiquorShop business experienced a commendable sales surge of 25.2%, indicating a strong consumer demand in this segment.
Despite challenges posed by South Africa's volatile operating environment, exacerbated by frequent power outages and the consequent reliance on diesel generators, Shoprite remained steadfast. The company incurred a substantial cost of R500 million to sustain operations over a 182-day period, averaging R2.75 million per day. However, despite this significant expense denting trading profits, Shoprite managed to achieve an 8.6% increase in headline earnings, reaching 610.5 cents per share, even when including discontinued operations.
In a nod to its shareholders, Shoprite elevated its interim dividend by 7.7%, reflecting the company's confidence in its financial stability and future prospects. Moreover, the group's other operating segments, including OK Franchise, Transpharm, and Medirite Pharmacies, reported a commendable sales increase of 23.1%, further underlining Shoprite's diversified revenue streams and resilience.
Shoprite's ability to navigate through adversity while delivering impressive financial results underscores its unwavering commitment to its customers, shareholders, and the South African economy at large. As the retail giant continues to expand its footprint and innovate in the face of challenges, it remains a beacon of strength and stability in uncertain times.
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