Our opinion on the current state of SHOPRIT(SHP)
Shoprite (SHP) is Africa's largest grocery retailer and consumer goods company. Despite facing intense price competition, which has limited supermarkets' ability to pass on price increases, the company has shown resilience. Its share price, which fell from R275 in March 2018 to around R100 in July 2020, has since recovered, as the company stands to benefit from improvements in the South African economy. Chair Christo Wiese maintains effective control with 42% through his deferred shares, although his ordinary shareholding has reduced to just over 10%.
In recent years, Shoprite has refocused its African operations, exiting Uganda, Madagascar, Nigeria, and Kenya, and in South Africa, acquired 56 Cambridge and Rhino stores from Massmart, reflecting a strategic shift towards consolidating core operations. Despite disruptions from unrest and looting, which affected 119 stores, the company reported 12% growth in merchandise sales and 7.2% increase in headline earnings per share for the year to June 2024.
In the latest quarter ending 30th September 2024, Shoprite's sales grew 10.4%, with South African supermarket sales up 11.4% and selling price inflation at 2.6%. The company also reopened its share buy-back program, purchasing R997 million in shares.
Technically, after breaking above its 200-day moving average in September 2020 at 11696c, Shoprite's share price has climbed to 30551c—a remarkable 161% increase. With continued growth from new store openings and ongoing investment in digital, supply chain, and sustainability, Shoprite is expected to further capitalize on South Africa’s economic recovery, as loadshedding eases and with possible political shifts such as a government of national unity (GNU).
In recent years, Shoprite has refocused its African operations, exiting Uganda, Madagascar, Nigeria, and Kenya, and in South Africa, acquired 56 Cambridge and Rhino stores from Massmart, reflecting a strategic shift towards consolidating core operations. Despite disruptions from unrest and looting, which affected 119 stores, the company reported 12% growth in merchandise sales and 7.2% increase in headline earnings per share for the year to June 2024.
In the latest quarter ending 30th September 2024, Shoprite's sales grew 10.4%, with South African supermarket sales up 11.4% and selling price inflation at 2.6%. The company also reopened its share buy-back program, purchasing R997 million in shares.
Technically, after breaking above its 200-day moving average in September 2020 at 11696c, Shoprite's share price has climbed to 30551c—a remarkable 161% increase. With continued growth from new store openings and ongoing investment in digital, supply chain, and sustainability, Shoprite is expected to further capitalize on South Africa’s economic recovery, as loadshedding eases and with possible political shifts such as a government of national unity (GNU).
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