“The year to June 2014 was one in which we invested heavily in the future of the Group in anticipation of the next upswing in the economy and achieved more than 100 billion rand in turnover for the first time. Market share increased for the 8th consecutive year,” Whitey Basson, CEO of Shoprite, said in a statement.
[DATA SHP:Shoprite] is a South African retail chain store with 1,948 stores in 15 African countries.
(READ MORE: Shoprite turnover up 9.7% due to African expansion)
Trading profit for the 12 months to June 2014 was up 6 per cent to 5.7 billion rand from 5.3 billion rand in the same period in 2013.
Turnover also showed significant growth, increasing 10.5 per cent to 102.2 billion rand from 92.4 billion rand.
Turnover was further boosted by the robust performance of the group’s non-South Africa operations due to the rand’s weakness against the US dollar, as well as against a number of other African currencies.
(READ MORE: S.Africa's Shoprite to see rise in turnover)
Headline earnings per share grew 3.3 per cent to 697.6 cents from 675.4 cents in the previous comparative period.
Earnings before interest, taxation, depreciation and amortisation increased by 8.7 per cent to 7.4 billion rand from 6.8 billion rand in 2013.
“Food retailing was dominated in the year to June 2014 by consumers’ lack of disposable income given the low economic growth, persistently high unemployment and disruptive labour unrest,” Shoprite explained.
“What was experienced on the sales floor was a reflection of [South Africa’s] broader economy, which struggled to maintain a growth rate of 2 per cent.”
The group’s trading margin took a slight dip from 5.8 per cent to 5.6 per cent.
As of June 2014, a total of 1,046 supermarkets were opened, compared to 954 stores in the same period in 2013. The supermarket brands in question were Shoprite, Checkers, Checkers Hyper and Usave.
“Of the three brands, Shoprite remains the largest in terms of turnover and the number of stores, which reached 400 during the year. However, its turnover growth slowed to 7.5 per cent due to the adverse market conditions affecting its target market,” Shoprite explained.
The Hungry Lion fast food chains totalled 167 as of June 2014 from 166 in the previous year, OK Furniture stores totalled 320 in June 2014 from 287 in 2013, and House & Home stores totalled 48 for the period under review from 49 in 2013.
The OK franchise totalled 367 stores for 2014 from 380 in 2013. Shoprite’s total stores outside of South Africa totalled 14 for the period from 16 in June 2013.
“With economic growth expected to remain below 3 per cent in the new financial year there is not much relief in sight for the beleaguered South African consumer,” said Shoprite.
“To retain present levels of profitability would require strict discipline and cost control.”