Shoprite says South Africa generates 85% of group supermarket sales

Shoprite Holdings, Africa's largest supermarket chain, revealed that South Africa contributed 85% of its group supermarket sales during the 52 weeks ending June 28. This data, shared in a regulatory filing, highlights the company's continued heavy reliance on its home market despite expanding its operations in other African countries. In the filing, Shoprite also projected that earnings per share from continuing operations could rise by up to 14.7%, with a significant boost expected from its e-commerce business.

The retailer's optimistic outlook was welcomed by investors, leading to a sharp rise in the company's shares following the trading update. Shoprite's shares surged as investors responded positively to the earnings growth projection. The company's Checkers and Checkers Hyper chains, which are premium-focused, reported a 10% growth, surpassing the 4.3% growth recorded by the Shoprite and Usave brands.

The relatively modest contribution from markets outside South Africa underscores the company's strategic focus on its home market. The restructuring of Shoprite's business operations after it exited direct ownership of its Nigerian subsidiary has led to the Nigerian business being run independently under the Shoprite franchise. Local management in Nigeria is now tasked with addressing challenges such as inflation, currency volatility, and rising operating costs.

Despite rumors that Shoprite had ceased operations in Nigeria, the company remains committed to expansion, with new stores set to open in Lagos. These plans are ongoing despite the persistent challenges faced by the retailer, including inflation, exchange-rate volatility, and rising operating costs.