Supermarket group Shoprite said on Tuesday its turnover increased by 3.1% to R145.3 billion in the 12 months to July, under what it called testing trading conditions.
The group’s internal inflation, or its own selling prices, dropped off significantly to 0.5% from 7.3% in the previous year as Shoprite strived to offer the most affordable products to financially stressed customers.
This, together with the effect of no economic growth, crippling unemployment levels and value-added tax, petrol, input costs and other price increases on customers, affected top line and profit growth, with trading profit 1.4% lower at R8 billion.
The company said its core South African supermarket operations, trading through 1 610 outlets and representing 74% of total sales, increased turnover by 5.7% despite deflation in selling prices for six out of the twelve months. Internal inflation declined to just 0.3% from 5.9%, with 13 241 products in deflation during the year.
“This is testimony to Shoprite’s commitment for almost 40 years to put customers first by keeping prices low,” CEO Pieter Engelbrecht said. “The group is able to provide some relief to customers under unprecedented financial pressure.”
Turnover at non-South Africa supermarkets operations across 14 countries declined by 7%, measured against exceptional growth in Angola in the prior year and reflecting slow economic recoveries and currency fluctuations in the major countries of operation.
“The group’s imminent expansion into Kenya provides an exciting opportunity and reflects its ongoing commitment to the African continent, where it has a significant competitive advantage,” Shoprite said.