South African supermarket operator Shoprite Holdings saw its earnings climb in the first half of the year, despite what it described as a “difficult” trading environment.
In the six months to the end of June, earnings were up 26.6% to ZAR4.15bn (US$405.2m), the retailer reported today (21 August). Operating profit grew 17.4% to ZAR5.36bn.
Sales in the period reached ZAR92.75bn, a 12.1% increase on the prior year period.
Shoprite CEO Whitey Basson said growth within South Africa was “hampered” during the year by “widespread labour unrest, rising costs fuelled by a weak rand, falling commodity prices and consumers’ lack of disposable income due to high levels of indebtedness”.
Looking ahead, he added that consumers would be “even more exposed” to the impact of the weaker rand as it worked itself through the economy.
“We have therefore decided to invest substantially in the group’s price leadership position by absorbing some of the inflationary impact on the consumer. Although this is bound to put margins under pressure, we nevertheless expect to achieve acceptable turnover and profit growth in the new financial year.”
Shoprite opened 114 stores in the period, bringing its total to 1,456.