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Shoprite continues to gain market share

Shoprite continues to gain market share

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Retailer Shoprite, in an operational update for the quarter ended September 2022, said yesterday its market share gains measured 1.4%, extending the period of uninterrupted market share gains in its core South African supermarket business to 43 months.

Shoprite’s core Supermarkets RSA segment, including the Shoprite, Usave, Checkers, Checkers Hyper and LiquorShop brands, grew in sales by 19.9% for the first quarter – boosted by increased customer volume growth and higher average basket spend.

SA’s largest grocer said selling prices rose by 8.2% compared to the previous year.

Its furniture segment's sales increased by 5.2% during the first quarter and remained mostly cash sales based, with credit sales participation measuring 14.9% of sales for the first quarter.

Shoprite's other operating segments, made up of OK Franchise, Transpharm and Medirite Pharmacies, as well as Checkers Food Services, reported a 10.8% increase in sales.

"Our sales to the OK Franchise division increased by 13.6%. OK Franchise opened a net 12 new stores during the period," the group said.

In the prior quarter ended September 2021, social unrest and Covid-19 lockdown closures impacted Shoprite’s sales growth.

"South Africa's July 2021 social unrest resulted in 231 stores being severely impacted due to looting and/or fire damage. In addition, precautionary measures and logistical impediments kept adjacent stores in the impacted regions not directly affected, closed for a period of a few days up to a week in certain instances. At the end of the first quarter, 23 stores remain closed," Shoprite said.

As a result of South Africa's Covid-19 lockdown regulations, its Supermarkets RSA LiquorShop business was not able to trade for 48 of the 91 days in the first quarter of 2022.

Shoprite said cost increases, notably spending on fuel and diesel, jumped year on year.

The approximate 56% year-on-year increase in fuel price continued to impact its cost of supply chain and general operations, but more so as a result of unprecedented periods and stages of load shedding in South Africa during the first quarter, while its diesel expense had considerably increased as well.

However, Checkers Sixty60 continued to experience notably strong growth in sales during the first quarter despite its incredible growth trajectory built up over the almost three years since its launch.

"The continued success of this one-hour, on-demand, grocery delivery app has led Checkers to open its first dark store in Cape Town during the first quarter," the group said.

Its Supermarkets RSA segment opened 46 stores during the first quarter: seven Checkers, one Checkers Hyper, two Shoprite, 10 Usave, 18 LiquorShop, four Petshop Science, three Checkers Little Me and one Checkers Outdoor.

"On a net basis, store growth for the segment over the first quarter measured 44 new stores. The group's core Supermarkets RSA operating segment is on track to open its planned 220 new stores for our 2023 financial year," Shoprite said.

Looking forward, the group said it was well-positioned to meet its customer's needs over the festive season.

"From an inventory position, we are well stocked and [we] believe adequately positioned to fulfil our new store obligations and ensure product availability in the event of any global or local supply chain constraints. As a result, we are pleased to report the recent Transnet strike impacting South Africa's ports for 11 days did not unduly affect our operations," Shoprite said.

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