KAMPALA – South Africa’s largest food retailer, Shoprite, has signalled its exit from Uganda and Madagascar, adding to a list that already includes Nigeria and Kenya, as the group focuses increasingly on its core SA business.
Shoprite has been trading in the rest of Africa since 1990, but has battled currency volatility and struggled in some markets, with the latest announcement concerning 10 stores in Madagascar, and 5 in Uganda.
The group completed the sale of its Nigeria operation in June without putting a price it, with the group also closing its last stores in Kenya earlier in 2021. In a trading update on Monday, the group said Uganda and Madagascar were being treated as discontinued operations, meaning they were not expected to feature in future reporting.
With the latest announcement, Shoprite would be operating in 11 countries in Africa, including SA, where it generates almost 80% of its revenue.
In its trading update, Shoprite said sales of its furniture business jumped in the first half of 2021, though those stores were also disproportionately hit by looting and violence that gripped SA in July.
In the update, which is for the 53 weeks to July 4, Shoprite said sales in its furniture business, made up of OK Furniture and House & Home, rose almost a quarter to R6.8bn, including growth of 38.6% in the second half of the period.
A number of other JSE-listed firms, including Cashbuild and KAP Industrial, have also indicated robust demand for better living conditions so far this year, while Shoprite’s furniture stores had also been disproportionately affected by violence and looting in July.
Shoprite has reported that of the 1,189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper banners, 119 stores were severely affected due to looting and fire damage. This also affected 35 of its 340 SA furniture stores, and 54 of its 537-store RSA LiquorShop business.
Shoprite said on Monday total sales of merchandise from continuing operations rose 8.1% to R168bn, with its core Supermarkets SA business growing 9.3%.
LiquorShop sales increased 4.4%, including a 21.8% decline in the first half, and sales growth of 53.6% in the second.
Growth was significantly hampered by the mandated liquor trade closures forming part of Covid-19 lockdown regulations, Shoprite said, and in total the LiquorShop business was closed for 144 days — 79 days in the first half and 65 days during the second.
In morning trade on Monday, Shoprite’s shares were trading 2.09% higher at R173.24, having risen almost a quarter so far in 2021.
Discussion about this post