Monday, September 06, 2010

All's right with Shoprite

South African Retailers have managed to maintain positive growth for 6 consecutive months in a tough economic environment. Although the retail sector as a whole experienced growth, not all the fortunes were positive. Massmart were particularly hard hit and experienced a drop in their annual earnings, which caused their share prices to drop by almost 9%. One company however, outshone the rest.

Africa’s biggest grocer, Shoprite Holdings, managed to outperform the competition yet again. Over the year to June 2010 it held an impressive 32.6% share of the market, the highest of all supermarket groups in South Africa, up from 31.4% a year ago. Annual turnover increased 13.6% to R64, 402 billion and their trading profit rose 18.7%. Headline earnings per share rose 15.6% to 451.6 cents, good news for investors who have been snapping up retailers due to increased consumer demand.

The consistent, positive growth of the retail giant has afforded it the opportunity to invest in a aggressive expansion strattegy. Over the next financial year, Shoprite will seek to borrow up to R3.5 billion to facilitate the plans which include opening 85 stores in Africa.

Through the years Shoprite Holdings has proved itself as a formidable retailer in South Africa and have secured their position as Africa’s leading retailer.


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