Africa’s largest retailer, Shoprite Holdings Limited, has reported a 9.3-percent increase in its sales for the first quarter of its current 2022 financial year despite the impact of civil unrest in South Africa on its core operations.
The group’s core business, Supermarkets RSA, which includes the operations of Shoprite, Usave, Checkers and Checkers Hyper, reported an 11.6-percent increase in sales in the first quarter of its 2021 financial year driven by market share gains during the quarter.
Figures contained in the group’s trading update revealed that the leading retailer posted resilient results despite the mandated closure of its LiquorShop business, which due to South African COVID-19 lockdown regulations was not able to trade for 48 of the 91 days in the quarter.
Shoprite was also able to weather the storm from the devastating July 2021 civil unrest in KwaZulu-Natal and Gauteng, which resulted in 135 RSA supermarkets and 54 RSA LiquorShops being severely impacted due to looting or fire damage.
With reference to the damage caused by the civil unrest, the group estimates the book value of the damages to property, fixtures and fittings, stock and fleet to amount to R1.25 billion ($81.84 million).
To cover the damages, Shoprite received an initial R500-million ($32.74 million) payment from Sasria (South African Special Risks Insurance Association) in September 2021.
At the end of the quarter, 47 stores extensively damaged during the civil unrest remained closed. Of these, 17 are expected to open by June 2022, while 24 stores will take longer and some may require relocation, the remaining six stores will not reopen.
Despite the disruptions, the South Africa-based retailer was able to add 29 new stores, two Checkers, one Shoprite, eight Usave, 17 LiquorShops and one Petshop Science.
On a net basis, store growth for the segment in the quarter measured 26 new stores. The group’s core Supermarkets RSA operating segment is on track to open its planned 131 new stores for our 2022 financial year.
Pieter Engelbrecht, the CEO of Shoprite, disclosed that despite the impact of the disruptions that the retailer has experienced so far, it will continue to create increased value for shareholders in line with its commitment to stakeholders and effective execution of its strategies.
As of press time, Nov. 16, shares in the leading retailer were trading at R203.65 ($13.33) per share, 2.92-percent higher than its opening price this morning.
Christo Wiese, the South African billionaire who played a critical role in the growth of Shoprite, received R343.3 million ($23.2 million) in dividends at the end of the group’s 2021 financial year.