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Shoprite surge despite a slowdown in alcohol sales

| Retailer trading results

AFRICA'S largest retailer Shoprite posted a 4.7 percent growth in total merchandise sales to R83.4 billion during the six months ended on December 27 last year, despite the ban on liquor trading hurting its overall performance.

Shoprite said yesterday that it managed to increase its total sales by 6.3 percent during the period.

The group said that the ban on liquor sales due to the nation wide lockdown regulations to curb the spread of Covid-19 saw its LiquourShop division record a 21.8 percent plunge. “The total number of days that our liquor business was closed added up to 79 days over the six months: 60 days during the first quarter and 19 days during the second quarter,” said Shoprite.

However, the group said its core business, the South African supermarkets, was resilient and contributed 78 percent to total sales.

It said the supermarkets' growth inched up by 5.6 percent and like for like by 4.8 percent.

The South African supermarkets business, excluding LiquorShop sales, achieved a 7.8 percent sales growth, and like-for-like, growth was 5.7 percent, said Shoprite.

Checkers Hyper continued to be star performers as sales increased 11.1 percent while Shoprite and Usave grew 5.6 percent.

The furniture business comprising OK Furniture and House & Home surged 15.7 percent and by 17.3 percent on a like-for-like basis.

“While growth remained high overall, growth during the second quarter was impacted by an already high base in December 2019,” said Shoprite, adding that said credit sales participation declined to 11.8 percent compared with 13.7 percent a year earlier. The group's furniture segment closed 10 stores.

The group's other operating segments, comprising OK Franchise, Transpharm, MediRite Pharmacies, Checkers Food Services (CFS) and Computicket, reported sales growth of 10 percent.

Shoprite said that while the MediRite Pharmacies and Transpharm business traded well, both CFS and Computicket were negatively impacted by the Covid-19 lockdown regulations given their reliance on tourism, hospitality, travel and eventing.

 “The group's OK Franchise division remained resilient, achieving sales growth of 8.1 percent despite the impact of the liquor lockdown restrictions,” said Shoprite.

The group added a total of 28 OK Franchise stores during the period.

It confirmed that the terms of sale of its Nigerian business had been concluded and that the transaction had been lodged with the Nigerian Federal Competition and Consumer Protection Commission for approval.

“Management expects the transaction to be approved by the end of the 2021 financial year,” said Shoprite. Last August, Shoprite announced its decision to exit or cut its exposure to the Nigerian business after 15 years of operating in that country.

Shoprite shares rose 0.40 percent on the JSE yesterday to close at R145.02.

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