Number of Shoprite stores up by 90

2012-08-22 00:00

GIANT retailer Shoprite displayed strong resilience amid tougher conditions, increasing its store-footprint — which includes Checkers, Shoprite, Checkers Hyper, House & Home, OK Furniture and Hungry Lion — by 90 stores and employing 7 000 new staff members across Africa and South Africa over the past year or so.

The group, which now employs more than 100 000 people, said yesterday that headline earnings per share rose 19,6% to 607,04 cents for the year ended June 2012.

Its turnover increased by 14,4% year-on-year to R82,7 billion.

Despite the challenging trading environment, the group’s expansion plans appear to be gaining momentum. Judging by Shoprite’s financial results, it appears that the group plans to open more stores, particularly when it comes to brands like Usave, Checkers and Shoprite.

The main area of concern for Shoprite revolves around the widespread expectation that food prices will rise in the months ahead on the back of poorer weather conditions and grain harvests in the U.S..

CE Whitey Basson said in a statement yesterday that although the group’s internal food inflation within its South African stores was only 4,9%, higher food inflation would be in the offing in the near future.

“This slight buoyancy in the market has persisted after year-end, but it is doubtful whether it will last as food prices are bound to rise in line with international markets,” Basson said.

An agricultural economist at FNB, Jan van Zyl told The Witness that he expects food prices — particularly when it comes to protein-related products like eggs, chicken, dairy and beef — to rise during the festive season. Maize and rice prices could also rise.

Van Zyl said increased demand in the summer months would put pressure on consumers’ pockets.

The chief economist of Investment Solutions, Chris Hart, told The Witness that higher inflation, particularly food inflation, would erode the discretionary spending of many consumers.

Basson is alert to the danger, noting: “Nothing on the horizon suggests the pressure on consumers’ disposable income will ease off.”

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