Shoprite Holdings’ OK Franchise business division reported strong sales growth of 23.8% in the 52 weeks to June 30 at a time when many grocery retailers are reporting only single digit sales growth.
A Shoprite operational update said this growth had been boosted by the opening of 73 OK Franchise stores in the year, compared with 22 opened in 2023 – the OK Franchise division ended the year with 608 stores.
The franchise’s sales growth was also far ahead of the group’s overall growth – group merchandise sales increased 12% to about R240.7 billion from continuing operations, including an impact of hyperinflation from Ghana.
Shoprite’s core Supermarkets RSA segment opened a net 201 stores versus 301 in 2023. Of the net new openings, 20 were Shoprite, 22 Usave, 25 Checkers and 71 LiquorShop stores.
The remaining 63 were new format, adjacent category specialist stores. Petshop Science added 33 stores to total 86 stores; Checkers Outdoor added 14 new stores to total 22 stores; UNIQ clothing added 13 new stores to total 22 stores and Little Me opened three new stores to total 12 stores.
The group added a net 292 stores during the period, which included the OK Franchise stores, bringing the total stores in the group to 3 639.
Supermarkets RSA grew sales by 12.3%, contributing 81% to group sales. This was against the prior year in which sales increased by 17.8%.
“Unlike our first half period, sales growth which included the stores acquired from Massmart Holdings and reported against a base in which they were not included, our second half sales growth of 10.1% was achieved with the acquired stores … included in our prior year base.”
Like-for-like sales growth for the 52 weeks measured 6.3% – the stores acquired from Massmart were included in like-for-like sales growth only for the second half period.
Internal selling price inflation averaged 5.8%, this after it averaged 7.7% in the first half and 4.2% in the second half, and ending at 3% for June 2024.
Checkers and Checkers Hyper reported sales growth of 12.3%, with online sales from the Checkers Sixty60 on-demand platform increasing by 58.1%.
Shoprite and Usave reported sales growth of 10.7%, while LiquorShop sales increased by 20%.
Supermarkets Non-RSA’s sales increased 6.1% excluding hyperinflation and contributed 8.6% to group sales. Supermarkets Non-RSA’s store base increased by 15 stores to total 266 stores in nine countries.
The Furniture segment, contributing 3% to group sales, reported a 2.3% increase in sales for the year, with like-for-like sales up by 2%. The segment’s store base fell by four stores to end the year at 430 stores.
The group’s other operating segments, comprising OK Franchise, Transpharm, Medirite, Red Star Wholesale Catering Services and Computicket, reported sales growth of 21.1%, representing 7.4% of group sales.
The group opened seven Medirite Plus standalone drug stores during the period to end the year with 13 stores in this new format, not including the 126 Medirite in-store pharmacies located within the core South African supermarkets business.
The cost of diesel to power generators during load shedding across the Supermarkets RSA store base for the year amounted to R754m, compared with R500m in the first half. The decrease in diesel costs however had to be considered in light of a commensurate increase in electricity usage.
As a result, the percentage increase in the water and electricity expense for the year was expected by the group to be mid to low single digits.
BUSINESS REPORT