HY 2022
- The Shoprite group, encompassing Shoprite, Checkers, Checkers Hyper, Usave and its Liquor stores, reported a blowout set of interim results which saw a 25.5% increase in interim profits. Its multi-brand franchise of 3000 outlets grew sales by 10% to R91 bn, gaining market share from other food retailers for 34 consecutive months, and with its store base now in reach of 85% of its customer base.
- Trading profit was up 14.5% to R5.4 bn and Adjusted HEPS by 32.5% to 536c.
- Organic growth seems set to continue with planned store expansion in its liquor outlets, SIXTY 60 (its home delivery services), and the new Checkers upmarket store formats, which have made inroads with the higher LSM customer group.
- Checkers’ lower prices for high-end foods, appears to be taking market share from other competitors such as Woolworths, at attractive profit margins.
- The group recently opened its first baby merchandise store, Baby Me, with that market estimated to be in excess of R12 bn. This strategy is similar to Dis-Chem, which purchased Baby City in 2020.
- In addition, the company has made a foray into the Pet shop market, having already opened 12 stores, with that industry estimated to be worth in excess of R5 bn.
- Expansion into areas such as the Medirite pharmacy chain, with standalone stores now a profitable entity within the group, could in time compete with established groups such as Clicks and Dis-chem.
- The entrepreneurial flair of the group, growing into niche areas of higher margin retail, and with its good record of capital allocation, is a catalyst for the future growth of the group. The board declared an interim dividend of 233c, an increase of 22%, on the back of strong cash generation.