Johannesburg – Africa’s biggest grocer Shoprite Holdings [JSE:SHP] booked a 15.6% jump in first-quarter sales helped by a robust showing outside its core South African market and favourable currency swings.
Shoprite, which operates in 17 African countries outside South Africa, said on Monday stores in those markets grew sales by 34.3% in the three months to end-September. It said in constant currency terms, they delivered a sales growth of 26.4%.
The Cape Town-based company, which opened 20 stores in several African countries since November last year, has been pushing aggressively into fast-growing markets on the continent with a focus on Nigeria, the Democratic Republic of Congo and Angola.
By 08:45 GMT, shares in the company were up 1.36% at 180.32, extending gains so far this year to more than 30% and reflecting expectations of healthy returns from its expansions in the rest of Africa.
Domestic retailers, which are also expanding into the rest of Africa, have been the darlings of investors in recent months but most analysts have said they have pushed shares to unjustifiable levels.
Shoprite’s mainstay South African supermarket business grew sales by 12.2%, reflecting increasing competition in the grocery market where Walmart’s South African unit Massmart Holdings [JSE:MSM] is looking for a bigger presence.
The company said it was difficult to predict spending patterns into the festive season because consumers are under pressures.
Consumers are battling with high personal debt levels, rising electricity prices and chronic unemployment but above-inflation wage hikes and decades-low interest rates have somewhat softened the blow.
Shoprite shares rose more than 1% to R178, becoming the biggest percentage gainer on the benchmark Top 40 – (Tradeable) [JSE:J200] index.