ANGOLA, AUGUST 23, 2016 – Africa’s largest retailer Shoprite Holdings posted a 17 percent jump in full-year profit on Tuesday, shrugging off competition in South Africa and buoyed by strong sales in Angola.Diluted headline earnings per share for the 53 weeks ended June rose 17 percent to 899.7 cents from 769.1 cents. (For 52 weeks it was a 12.7 percent rise to 867.0 cents)
Shoprite publishes results for full week periods and this year it reports 53 weeks.
Shoprite kept its market share in South Africa above 30 percent despite intense local competition, said Chief Executive Whitey Basson in a statement.
South Africa, which accounts for four fifths of the company’s sales, has “remained caught in a low-growth trap because of external factors beyond its control such as the continued slowdown in the Chinese economy and the uncertainty following Brexit,” Basson said.
Shoprite kept costs tight and subsidised certain basic foodstuffs to retain the business of cash-strapped consumers.
The low price of oil and a lack of foreign currency stifled growth in West African countries such as Angola and Nigeria.
But the Angolan business showed the sharpest growth, because “unlike most other retailers, Shoprite was not restricted in its trading by the country’s severe lack of foreign exchange,” it said.
The firm was able to replenish goods at its 29 Angolan supermarkets giving it a “near-exclusive availability of stock” while other retailers were hamstrung by foreign exchange rules.
Trading conditions in South Africa and other African markets where the retailer has a presence could become even more stressful, Shoprite said.
“The disposable income of a large percentage of our customer base will therefore remain under intense pressure,” it said.
Headline earnings per share is the main profit measure in South Africa which strips out certain one-off items.
