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South Africa's Shoprite weathers unrest to pump up first-half profit

03/08/2022 | 02:33am EDT
Shoppers leave the Shoprite store in Daveyton

JOHANNESBURG (Reuters) - South Africa's largest grocery retailer Shoprite Holdings Ltd reported on Tuesday a rise of 25.5% in half-year earnings, and said it expects selling price inflation to move higher during the second half of its financial year.

Consumer goods firms worldwide are battling a surge in costs of commodities, energy, transport and labour. Russia's invasion of Ukraine is compounding inflation pressures, with commodity prices, including wheat and maize, surging since late February.

In South Africa, food producers Tiger Brands and RCL Foods, which service all grocers in the country, have recently announced plans to take additional price increases to the market.

"Inflation pressures are mounting and as such we expect selling price inflation to move higher during the second half of our financial year," Shoprite said.

In the six months ended Jan. 2, Shoprite's South Africa supermarkets business had selling price inflation of 2.6%, which declined from 4.3% in the previous six-months.

In its rest of Africa supermarkets unit, food inflation averaged 7.6%.

Shoprite said headline earnings per share, the main profit measure, from continuing operations rose to 522.6 cents in the period, from 416.5 cents in the six-months ended Dec.27, 2020.

Shoprite, which has more than 2,000 corporate owned supermarket stores in 11 African countries, declared an interim dividend of 233 cents, up 22%.

Group sales rose by 10% to 91.1 billion rand ($5.92 billion)as customer visits at its core supermarkets business in South Africa increased by 6.2% and the average basket spend rose by 4.8%.

($1 = 15.3865 rand)

(Reporting by Nqobile Dludla)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
DOW JONES AFRICA TITANS 50 INDEX -0.47% 435.27 Real-time Quote.-15.85%
DOW JONES SOUTH AFRICA(ZAR) 0.86% 1870.08 Real-time Quote.-4.35%
RCL FOODS LIMITED -1.08% 10.1 End-of-day quote.-22.43%
S&P AFRICA 40 INDEX -0.48% 139.89 Real-time Quote.-16.79%
SHOPRITE HOLDINGS LIMITED -1.94% 199 End-of-day quote.-4.73%
TIGER BRANDS LIMITED 0.75% 144.1 End-of-day quote.-20.39%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 1.54% 62.7 Delayed Quote.-24.94%
WHEAT FUTURES (W) - CBR (FLOOR)/C1 -1.70% 1157.5 End-of-day quote.50.18%
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