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Shoprite says it has created over 4 300 new jobs

Renewed focus on its core home market seems to be paying off.
A Shoprite store, the anchor tenant at Fairvest's Southview Shopping Centre in Soshanguve Gauteng. Image: Supplied

Shoprite, Africa’s largest food retailer which boasts a 140 000-strong workforce, created 4 305 new jobs in South Africa in the second half of 2020, according to group CEO Pieter Engelbrecht.

This is revealed in the group’s latest interim results for the six-months ending December 27, 2020, released on the JSE on Tuesday.

It comes despite there being some Covid-19 trade restrictions still in place during the period, including the liquor bans and curfews (that impacted stores which have late trading times, especially during the peak festive season).

Shoprite did not specifically say in which areas of the SA business the jobs were created (most likely through the growth of its highly successful Checkers Sixty60 on-demand delivery service and through new store openings such as Rosebank Mall and Mall of Thembisa).

Nevertheless, it will be welcome news in the face of South Africa’s record unemployment rate and as some of its competitors, such as Massmart, have cut jobs and closed stores.

Read:
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In the results statement, Engelbrecht notes that the Supermarkets RSA business has achieved 22 months of uninterrupted market share gains.

The food retail giant, which counts Shoprite, Checkers, USave and OK stores among its chains, reported solid results for its core ‘Supermarkets RSA’ business despite trade restrictions.

Its SA business, which accounts for 78% of the group’s income, grew sales by 5.6% during the half-year. Excluding liquor sales, which were impacted by the alcohol bans, the group increased sales in South Africa by 7.8%.

“This is an incredible result given that our customer base spans the entire South African food retail spectrum. Our South African supermarkets’ internal selling price inflation of 4.3% for the six months reflects our unwavering commitment to our customers on price,” says Engelbrecht.

“In significantly more adverse conditions, our Supermarkets Non-RSA continuing operations achieved constant currency sales growth of 0.9%. The business remained vigilant, combating the challenges faced across Africa, however, currency devaluations again eroded much of our efforts.”

Shoprite is forging ahead with its exit from the east and west African hub nations of Kenya and Nigeria, choosing to focus more on its core home market (SA) where it is seeing stronger returns and growth.

“We closed the last of our Kenyan stores in February 2021 and are at the approval stage in terms of the sale of our Nigeria supermarket operation,” says Engelbrecht.

“From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can,” he notes.

Shoprite increased its trading profit by 18.3% in the period, to just over R4.7 billion. The group also managed to make headway in bringing down its debt by R5.9 billion, to R5.5 billion.

Its capital expenditure for the half-year came in at R1.6 billion, most of which likely invested into its core SA business.

“None of this was achieved in isolation. It was due to the collective effort of the more than 140 000 employees across the group… who came together daily to serve our customers and sustain the growth of this great company,” Engelbrecht proudly declares.

Shoprite declared an interim dividend of 191 cents per ordinary share, which is up 22.4% up on its comparative half-year.

The group’s share price firmed around 3.5% to R150.35 per share by 12h35 on Tuesday, following the release of its latest results. This means the stock is up more than 11% for the year to date.

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Drop in the ocean compared to how many jobs were lost.

Great work Shoprite. I was once in esteemed company where the main shareholder aka boss told me that if government stopped BEE tomorrow, he would immediately stop importing goods from China and set up factories in South Africa and create 20,000 jobs. Now only if Government could see the light!

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