Shoprite’s impressive results dampened by R1.3bn spent on diesel during load shedding

Shoprite’s 2023 financial report shows double-digit growth, with sales reaching R215 billion, yielding higher profits for the food retail giant amid unprecedented load shedding.

Shoprite customers spent R26 billion more compared to a year ago, while saving over R13.5 billion in Xtra Savings.

Shoprite CEO Pieter Engelbrecht said the multibillion sales growth equated to 1.4% in market share for the financial year ended 2 July 2023.

“In the context of our power challenges, we are pleased to still report growth in headline earnings and dividends per share,” he said.

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Load shedding

According to Engelbrecht, the Shoprite group has spent R1.3 billion on diesel so it can run generators in stores during periods of load shedding.

“It’s disappointing, however, that if not for the R1.3 billion diesel expense… our market sales growth would have delivered higher returns for our shareholders,” Engelbrecht said.

“Similarly, our profit growth would also have resulted in a higher Shoprite Employee Trust distribution for our employees.”

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Growth against all odds

However, Shoprite’s core supermarkets saw a 17.8% sales growth, which Engelbrecht attributed to the group’s multi-year transformation strategy.

Sales in Shoprite’s Usave supermarkets grew by 15.6%.

Meanwhile, Checkers and Checkers Hyper yielded 18% sales growth.

The CEO said the company’s Sixty60 online order and delivery service had increased the retailer’s sales by 81.5%.

“[This validates] our strategy in terms of our investment in digital and data-led decision making,” he added.

“Shoprite and Usave’s commitment to lowest prices and affordability resulted in 15.6% sales growth.”

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Massmart acquisition

Shoprite’s sales was also boosted by the integration of 92 acquired Massmart stores into Shoprite, Usave and Shoprite Liquorshop operations, Engelbrecht said.

“We are pleased with the performance of these stores, especially in light of considerable customer equity that was lost due to the prolonged nature of the transaction period,” he explained.

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Shoprite Group’s achievements in digits:

• 340 new stores;
• 3 651 new jobs in addition to 4 480 jobs from Massmart acquisition;
• 4 480 employees since January 2023;
• 17.8% sales growth by SA supermarkets.