Shoprite gains market share despite virus disruptions
Shoprite reported a 10.4 per cent increase in half year earnings, declaring an interim dividend 22.4 per cent higher than the prior comparative period. The retailer closed the last of its Kenyan stores in February, and is at the approval stage on the sale of the Nigeria supermarket operation. Shoprite CEO, Pieter Engelbrecht joins CNBC Africa for more.
Tue, 16 Mar 2021 15:48:11 GMT
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AI Generated Summary
- Shoprite reports a 10.4% increase in half-year earnings and a 22.4% higher interim dividend, showing continued market share growth amid the pandemic
- The company's focus on essential foods and convenience has resonated well with customers, leading to gains in market share in key segments like convenience and fresh food
- Shoprite is strategically evaluating its operations outside of South Africa, closing stores in Kenya and finalizing the sale of its operation in Nigeria, while remaining committed to investments in select countries like Angola
South African retail giant Shoprite has reported a 10.4 per cent increase in half-year earnings, declaring an interim dividend 22.4 per cent higher than the prior comparative period. Despite challenges posed by the COVID-19 pandemic, the retailer continues to gain market share, with uninterrupted growth over the last 22 months amounting to 1.3 billion in value. Shoprite CEO Pieter Engelbrecht sat down with CNBC Africa to discuss the company's performance and future outlook. Engelbrecht highlighted the positive start to the calendar year, with the first half showing strong growth momentum. Although facing tough conditions due to high unemployment and industry closures, Shoprite's focus on essential foods and close-to-home convenience has resonated well with customers. The Checkers brand, in particular, has excelled, gaining market share in the convenience and fresh food segment. Despite the challenges of the pandemic, Shoprite has managed to adapt and thrive in the changing retail landscape. Engelbrecht pointed out the company's success in attracting more affluent customers to ad-hoc dining options, as well as capitalizing on delayed back-to-school shopping trends. Shoprite's ability to navigate these shifts in consumer behavior has been key to its continued market share gains. When asked about potential competition from other retailers, Engelbrecht remained focused on Shoprite's own performance and market share growth. He noted that the company's gains in market share have been consistent and substantial, reflecting a strong position in the retail sector. Engelbrecht also addressed the company's strategic decisions regarding its operations outside of South Africa. Shoprite recently closed its last store in Kenya and is in the process of finalizing the sale of its Nigerian supermarket operation. Engelbrecht emphasized that these moves are part of a broader strategy to assess each investment to ensure shareholder returns. While Shoprite remains committed to certain countries like Angola, the company is reevaluating its presence in other regions based on changing market conditions. Engelbrecht highlighted the challenges posed by devaluing currencies in some African countries, leading Shoprite to implement measures like increasing local sourcing to mitigate exchange rate risks. Despite these challenges, Shoprite remains optimistic about its investments in Angola and other select countries. The company's focus on strategic decision-making and adaptability in a changing market environment underpins its continued success and market share growth.