The Shoprite Group has recorded another year of South Africa market share gains, adding R12.6 billion in sales, the creation of 3 897 jobs and a record dividend.
The group’s sale of merchandise increased by 8.1% to R168.0 billion with an increased trading profit by 24.9% to R10.3 billion. Diluted headline earnings (DHEPS) per share increased by 20.1% to 952.5 cents (restated 2020: 793.4 cents) with adjusted diluted headline earnings (DHEPS) increasing by 20.7% to 883.8 cents (restated 2020: 732.5 cents).
The retailer’s full year dividend increased by 42.0% to 544 cents (2020: 383 cents) with the opening of 112 stores comprising of 76 corporate and 36 franchise stores.
“2021 was a challenging year for the countries in which we operate but because of the group’s commitment and execution, we increased sale of merchandise by 8.1%” commented Pieter Engelbrecht, CEO of the Shoprite Group.
“In rand terms, this growth equates to an additional R12.6 billion in sales on last year’s restated base to total a record R168.0 billion in sales for the year. Adjusting for the extra week included in this year’s reporting period, on a 52-in-52-week basis, our rand sale of merchandise growth on last year’s base measured R9.1 billion”.
The group’s core ‘Supermarkets RSA’ segment reported strong sales growth of 9.3% (52 weeks: 6.9%) from a high base and after accounting for the LiquorShop business being closed for 144 days during the year. The segment’s R133.9 billion in sales was a combined effort from the Shoprite and Usave businesses which increased sales by 8.8% with the Checkers and Checker Hyper businesses recording increased sales of 10.9%.
“This growth is a testament to our loyal customers and the relentless commitment of our team who ensured we delivered unsurpassed value, either in-store or digitally, throughout the year” commented Engelbrecht.
The group sold its Nigerian supermarket business, closing operations in Kenya (three stores) and classified its operations in Uganda (five stores) and Madagascar (ten stores) as discontinued. “The region remains challenging, but our capital allocation review coupled with various in-country initiatives have resulted in improved profitability”.
The group’s furniture segment increased sales by 24.6%, continuing to benefit from consumers spending in the categories of furniture and electronics. According to Engelbrecht, the growth reported by OK Furniture and House & Home is also a result of the proactive nature of its hands-on management team, its focused brand and customer strategy and the positive impact from its store base consolidation executed in recent years.
“Our other operating segments’ sales growth of 10.0% is commendable, especially considering that both Checkers Food Services and Computicket continue to be significantly impacted by Covid-19 and lockdown regulations. The OK Franchise brand goes from strength to strength, as evidenced by 8.2% sales growth this year”.
The digitally led future, being ushered in by the pandemic, is already a day-to-day reality for Shoprite. From an IT perspective, with the adoption of a single system of record a few years ago, the group has become increasingly collaborative and innovative. “This way of working influences our daily decisions across the business, and it plays an increasing role in our ongoing success. This is evidenced by the growth in our supermarkets sales and gross margin and by our market share gains which have continued, uninterrupted for twenty-eight months”.
In addition to transforming the way in which it operates, the group’s IT re-platforming has facilitated and fast-tracked its transformation as part of its digital and data-led future strategy having recently unveiled ShopriteX, the group’s digital tech hub which blends the best of data science, technology, and digital talent to save customers time and money through innovation.
After a year of incubation, ShopriteX boasts two industry leading innovations, namely the Xtra Savings Rewards Programme, South Africa’s fastest growing rewards programme and Checkers Sixty60, Checkers’ pioneering 60-minute grocery delivery service. Consumer response on both counts has been unrivalled, with the Xtra Savings Rewards Programme signing up over 20 million members and Checkers Sixty60 becoming the number one grocery app in the country with over 1.5 million app downloads. The on-demand grocery delivery app has scaled rapidly, operating nationwide from 233 stores which serve as micro-fulfilment centres.
“ShopriteX forms part of the group’s strategy to grow and monetize its ecosystem of value for consumers. We’ve spoken often about the next era of growth for Shoprite being about precision retailing and that future is now here. ShopriteX will use our rich customer data to create a ‘Smarter Shoprite’ and ultimately fuse the best of digital with our physical and operational strength across the continent” said Engelbrecht.
“Reflecting on this year of significant achievement on so many fronts, my sincere thanks go to our Shoprite people for their continued commitment and efforts throughout 2021. Despite being South Africa’s largest private sector employer, we still aspire to create employment as it is critical to improve the lives of our fellow citizens. On that front, we added 3 897 new jobs this year”.
“Specifically, to our employees in central Gauteng and KwaZulu-Natal, in relation to the tragic civil unrest that took place the week after our year-end close, there are no words that do justice to my appreciation for all you did to get us back into the business of serving our customers despite the circumstances. We have started the process of rebuilding our KwaZulu-Natal and central Gauteng operations. Similarly, we have used our Usave mobile truck and container stores to sustain our customers in communities where there was literally no semblance of infrastructure left to salvage. As a company Shoprite can proudly reflect on the pivotal role it played in putting South Africa back together and we look ahead to a 2022 that ends vastly different to how it began” he concluded.
