After four years of market share gains, Shoprite eyes even more with R8.5bn spend
By: Nick Wilson – News24
Shoprite's capital expenditure could be as much as R8.5 billion in its 2024 financial year, a quarter higher than in 2023, as it invests in store and supply chain expansion as well as ecommerce initiatives.
The JSE-listed retailer said on Tuesday the capex formed part of an extensive plan to pursue continued store growth and refurbishments across all supermarket formats, the next phase of a multi-year supply chain expansion to meets its "next decade volume and logistics requirements".
This came as the group reported its South African supermarkets business's sale of merchandise increased 17.8% to R173.6 billion for year to 2 July, saying its unbroken market share growth had been extended to more than four years. It also recorded double digit growth in sales across its core brands. This was while it increased diluted continuing headline earnings per share by 9.7% and it hiked its full-year dividend per share 10.5% to 663c.
CEO Pieter Engelbrecht said in commentary accompanying the results that customers "continued to vote with their wallets" in support of the group's efforts across its core supermarket and LiquorShop businesses in SA, spending an additional R26 billion more than last year.
"During a time when every cent really does count, this equated to a 1.4% increase in market share, extending our period of uninterrupted South African market share gains to 52 months."
Engelbrecht said the group was also pleased to report growth in its headline earnings and dividends but was disappointed by R1.3 billion in diesel expenses.
The company reported a "record year for store growth", adding 340 net new stores to its base in the year under review to total 3 326, adding that it had created 3 651 new jobs through this expansion. This was over and above the 4 480 people the group had employed as part of the acquisition of selected businesses from Walmart-owned Massmart.
Sales growth at its Checkers and Checkers Hypers came in 18% higher, while the group's online delivery service Sixty60 increased sales by 81.5%. Shoprite and Usave saw sales increasing 15.6%.
Post-year end, the group said sales in its core supermarkets division continued growing in double-digits, ahead of the market but at a lower level than reported in 2023 as a result of a reduction in selling price inflation and the higher base in the first quarter of last year.
Shares in Shoprite had fallen almost 2% in morning trade on Tuesday but are still up almost 10% on a one-year basis.