Shoprite hit by 489 armed robberies in a year, has ‘been to war’
- Shoprite's share price fell by more than 4% on Tuesday after it reported its annual results.
- The company says it has "been to war" as a long list of setbacks hit its local operations, including 489 armed robberies in a year.
- Its stores outside of South Africa also took strain, with trading profit down 53% in these markets.
Shoprite has "been to war" over the past six months, CEO Pieter Engelbrecht said in his presentation to analysts on Tuesday.
During this tough period, the retailer was knocked by a very weak economy, as well as a long list of other woes, including a new sugar tax, listeriosis, service delivery protests (which cost it 150 trading days) and the first VAT hike in 25 years.
The company was also hit by 489 armed robberies in the period from July 2017 to June 2018, a spokesperson confirmed to Business Insider SA – some 1.4 robberies a day.
Last month, a security guard was shot dead when a gang of 15 men robbed a Shoprite supermarket in Heidelberg, south of Johannesburg.
Its total dividend for the year came to 484c – compared to 504c last year.
Shoprite’s stores outside of South Africa were under major pressure. Sales in these markets fell by 7% and trading profit more than halved - with Angola seeing a large decline amid hyperinflation.
Sales at South African supermarkets grew by 5.7% for the year, but the past six months saw very tough conditions, with turnover up only 3.7%.
Shoprite’s market share in South Africa declined from 31.9% reported a year ago to 31.7%.
Gryphon research analyst and portfolio manager Casparus Treurnicht says Shoprite's weak nominal turnover growth in South Africa in the past six months – which he estimates to be less than 3% - could indicate that it may have lost market share to Pick n Pay. Pick n Pay’s South African sales grew by 8% in the three months to end-February.
Shoprite says it shielded customers from R2 billion in price increases amid the VAT hike and the new sugar tax. Some 13,241 Shoprite products are now cheaper than last year.
Read: We found hotdogs and chocolates for under R5 at Shoprite - here are some of the cheapest deals
After opening almost a liquor store a week over the past year, Shoprite is now the largest corporate liquor retailer in the country with 440 stores. Sales grew by almost 21%.
In his analyst presentation, Engelbrecht said he was optimistic about the impact of a new minimum wage and that rising food inflation was inevitable. “What goes down must go up.”
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