Shoprite Holdings and Woolworths Holdings have reported relatively strong sales growth in the second half of last year. Picture: Aupplied
Shoprite Holdings and Woolworths Holdings, two of South Africa’s biggest retailers, on Tuesday reported solid and similar sales growth during the second half of 2024 amid continuing low levels of consumer disposable incomes.
Shoprite Holdings said in an operational update for the six months to December 29 that its merchandise sales increased 9.6% to about R128.6 billion, excluding the furniture business, which is being sold to Pepkor.
Meanwhile, Woolworths South Africa saw turnover and concession sales growth of 9.1% for 26 weeks to December 29. Within the food business, turnover and concession sales growth of 11.4% and 7.3% was driven by volume growth from improved availability, ongoing innovation, and an enhanced value proposition.
Shoprite's Supermarkets RSA division, contributor of 83.7% of group sales, achieved sales growth of 10.4% versus 14.6% in the first half of the previous year. Like-for-like sales, or same-store sales, grew by 6.1% for the period versus 6.3% for the half year.
As an indication of falling inflation in general and how hard Shoprite must have worked to keep prices down, its internal selling price inflation averaged only 1.9% for the six-months, well down on 7.7% for the same first half a year previously.
Checkers and Checkers Hyper, inclusive of Checkers Sixty60, increased first-half sales by 13.5%, with online sales from the Checkers Sixty60 on-demand platform increasing by 47.1%. Shoprite and Usave reported sales growth of 6.7%. Shoprite and Checkers LiquorShop sales increased by 12.2%.
Supermarkets RSA opened a net 248 stores over 12 months to total 2,485 stores. Of these, 30 were Shoprite, 28 Usave, 34 Checkers, and 80 LiquorShop stores. The remaining 76 were new format specialist stores (Petshop Science added 53 new stores to 128 stores).
Woolworths Holdings directors said discretionary spending remained constrained in South Africa, but consumer sentiment was improving, supported by moderating inflation, interest rates easing, and the prolonged suspension of load shedding.
Woolworths directors said that in Australia, notwithstanding an uplift in consumer sentiment and the rise in consumer sector sales, buoyed by Black Friday, the sustained effect of high interest rates and elevated living costs continued to weigh on consumer behaviour and discretionary spend.
They said interim headline earnings per share were expected to decline by between 22% and 27% because, while the food business continued to perform strongly, the weaker-than-expected performance of the apparel businesses in both South Africa and Australia resulted in negative operational leverage for the group.
BUSINESS REPORT