Shoprite grew despite spending R500m to fight loadshedding

  • Shoprite Holdings spent R500 million in six months just to power diesel generators.
  • Thankfully, sales for that period amounted to R121.1 billion so the cost of keeping the lights on isn’t knee-capping the retailer.
  • It’s also notable that Shoprite Holdings has grown in all areas, including a 63.1 percent increase in online sales.

Between June and December 2023, Shoprite Holdings reportedly spent R500 million just to keep the lights on.

This is according to the company itself which issued an operational update for the second half of last year. The R500 million was spent on diesel which kept the lights on at Shoprite Holding stores in South Africa during loadshedding.

Interestingly, Pick n Pay reported last year it had spent R400 million to stave off the effects of loadshedding.

While half a billion Rand is nothing to balk at, the retail giant saw sales amounting to R121.1 billion during the reported period, a 13.9 percent improvement when compared to the second half of 2022. What makes these gains all the more impressive is the fact that customers saved a claimed R8.4 billion in Shoprite and Checkers’ Xtra Savings rewards programme.

Importantly, supermarkets in South Africa contributed a staggering 80.5 percent to Shoprite Holdings’ total sales, up 14.6 percent compared to the same period in 2022.

Perhaps the most notable area of growth for Shoprite Holdings is with Sixty60. Over the last six months of the year, online sales grew a staggering 63.1 percent. This illustrates the potential for growth in this area which could be even greater now that Shoprite Holdings has 2 237 stores after acquiring 285 from Massmart.

Shoprite Holdings has established itself as the go-to for fast grocery deliveries and while Pick n Pay and Spar have since launched their solutions and platforms, in our experience, Shoprite’s solution is just better and it’s been doing this for far longer so it has the wisdom of experience.

We should get a clearer look at Shoprite Holdings’ position in March when it releases its 2024 interim results for the period ended 31st December 2023. By the looks of this operational update, however, business is good despite loadshedding.

We’re especially curious about Shoprite Holdings’ dark stores. These are stores that are purely for deliveries which customers can’t go to. The retailer debuted its first dark store in 2022 but there hasn’t been mention of more since then.

With a growth spurt in Sixty60 and physical locations costing Shoprite Holdings millions, perhaps a dark store with lower overhead costs could be the move.


About Author


Related News