Skip to main content

Gauteng distribution glitches hit Shoprite sales

| Supplier news

A six-week strike added to teething problems in its largest distribution centre, and international operations took a heavy forex hit

Shoprite’s share price fell 4.6% to R174.50 on Monday morning after the grocery chain reported flat sales in the September quarter.

Sales suffered from distribution glitches in Gauteng, with a six-week strike worsening teething problems in its largest distribution centre, which handles more than half of the food the group sells.

“This resulted in significant lost sales opportunities, which naturally benefited some of the group’s competitors,” Shoprite CEO Pieter Engelbrecht said in the quarterly sales update.

“The situation has now normalised and a more positive volume trend is emerging in October on the back of improving product availability.”

Other reasons for the group’s turnover growing only 0.4% from the matching period in 2017 included 0.1% internal food deflation and the rand strengthening against other African currencies.

“Although some food price inflation in the next few months is inevitable given the current rand weakness and escalating transport costs, the group doesn’t foresee material increases in internal food inflation until 2019. This provides some good news for consumers ahead of the important festive season.”

The group opened 15 supermarkets in the September quarter, with 41 more new supermarkets planned before the end of 2018.

Engelbrecht said the group’s core South African supermarket business grew sales by 1.7% while its rest of Africa operations suffered an 8.6% decline measured in rand. 

The Angola kwanza depreciated by 76.3% and Zambia’s kwacha by 21% against the dollar since the beginning of 2018, Shoprite said.

“The core customer base of its Shoprite chain in particular remained under pressure from rising transport costs and unemployment.

“Checkers continued to show better growth, notwithstanding also being affected by availability issues in the broader Gauteng region,” Engelbrecht said.

Related Articles

Festive family fashion alert - Pick n Pay unvei...

Forget fugly clichéd holiday-themed jerseys: matching family pyjamas is the latest craze for the holidays and is flying off the shelves, says Pick n Pay Clothing.

Liberty Accelerates Unclaimed Benefits Pay Outs 

As part of its ongoing Unclaimed Benefits Funds tracing efforts, this year, Liberty has identified in excess of 13 000 people and paid over R105 million to members and beneficiaries who had a legitimate claim.

Shoprite and Checkers support small suppliers t...

Shoprite and Checkers are helping small suppliers grow their volumes this Black Friday as customers flock to its stores looking for value on everyday essentials and groceries between Thursday, 23 November and Sunday, 26 November 2023. 

Supermarket chain set to appeal judgment in ‘si...

By: Chevon Booysen - IOL Retail giant Pick n Pay has indicated its intention to appeal a Western Cape High Court judgment to damage all print works, all printed materials, product packaging, and the like bearing the infringing get-ups similar to ...

Woolies pulls Israeli couscous after 'credible'...

By: Ahmed Areff – Fin24 Woolworths has pulled Israeli-imported pearl couscous from its shelves, but has emphasised that the move was preemptive due to threats it received and not because it supported a boycott of the country’s products or was pro...