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SHOPRITE HOLDINGS LTD

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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).
JSE:SHP
by PDSnetSA
Our opinion on the current state of SHOPRIT(SHP)Shoprite (SHP) is the largest grocery retailer and consumer goods company in Africa. The company has faced intense price competition, which has prevented supermarkets from fully passing on price increases to consumers. The share price experienced a significant decline from a high of R275 in March 2018 to levels around R100 in July 2020. However, it has since recovered strongly and is expected to benefit directly from any improvement in the South African economy. Chairman Christo Wiese's major stake in Shoprite has been reduced to just over 10% of the ordinary shares, but he still holds 265 million deferred shares, effectively giving him 42% control of the company. Shoprite has exited several African markets, including Uganda, Madagascar, Nigeria, and Kenya. The company agreed to purchase 56 Cambridge and Rhino food stores from Massmart, which could strengthen its market position. As the South African and African economies recover, particularly post-COVID-19, Shoprite is well-positioned to benefit from increased consumer spending. In a report on the unrest and looting, the company stated that out of the 1,189 supermarkets trading under the Shoprite, Usave, Checkers, and Checkers Hyper banners, 119 stores were severely impacted by looting and/or fire damage. In its results for the 52 weeks ending 30th June 2024, Shoprite reported merchandise sales up 12% and headline earnings per share (HEPS) up 7.2%. The company generated R23.6 billion in cash from operations during the year and directed R7.8 billion towards its "Smarter Shoprite" strategy, which includes investments in new stores, store upgrades, digital and e-commerce, information technology, sustainability, and supply chain improvements. Technically, the share price broke above its 200-day moving average on 2nd September 2020, when it was trading at 11,696c. Since then, the share has appreciated to 29,500c, representing a gain of 152% over four years. The company is expected to continue benefiting from the end of loadshedding and the potential formation of a government of national unity (GNU) in South Africa.
JSE:SHP
by PDSnetSA
Our opinion on the current state of SHOPRITE(SHP)Shoprite, Africa's largest grocery retailer and consumer goods company, has navigated intense competitive pressures in the market, which has historically prevented supermarkets from significantly marking up prices due to price competition. The company's share price experienced a significant dip, falling from a high of R275 in March 2018 to around R100 in July 2020, primarily due to market conditions and internal challenges. However, it has since shown a robust recovery, indicating resilience and a potential for future growth, especially with any improvement in the South African economy. The influence of Shoprite’s chair, Christo Wiese, remains notable despite his reduced stake in ordinary shares to just over 10%. He retains significant control through 265 million deferred shares, amounting to 42% control of the company. This dynamic suggests a continued strong influence in the company's strategic direction. Shoprite has strategically streamlined its operations by exiting markets in Uganda, Madagascar, Nigeria, and Kenya, focusing on regions where it can leverage its strengths more effectively. This is complemented by its agreement to acquire 56 Cambridge and Rhino food stores from Massmart, enhancing its retail footprint and market penetration. The global downturn due to the COVID-19 pandemic has set a challenging economic backdrop, but recovery in global economies, particularly the American market, is expected to spur economic improvement across Africa. This prospect bodes well for consumer spending, which is crucial for Shoprite's business model focused on volume-driven sales. Recent unrest and looting had a significant impact, with 119 of its stores severely affected. Despite these setbacks, the company reported a 13.9% increase in merchandise sales and a 7.6% rise in headline earnings per share (HEPS) for the six months ending 31st December 2023. The company also expanded its physical presence, opening a net of 369 stores over the past 12 months, reflecting aggressive growth and confidence in its business model. Shoprite's management highlighted that despite the high base from the previous year, the growth in sales from its core business segment was significant, with an additional R12.4 billion in customer spending compared to the same period last year. This performance notably outpaces the rest of the market growth in South Africa, underscoring Shoprite's competitive edge and operational efficiency. Given the stock's current valuation, which remains more than 13% below its record high of 27632c set on 8th January 2024, Shoprite appears undervalued. The technical analysis further supports this optimism; the share broke above its 200-day moving average on 2nd September 2020, when it traded at 11696c. Over the subsequent 3.5 years, the share has appreciated by 136%, reflecting substantial growth and investment potential. Overall, Shoprite continues to demonstrate its capacity to navigate market challenges, adapt to changing economic conditions, and capitalize on growth opportunities. This positions the retailer as an attractive investment, particularly for those betting on a recovery in the African retail sector and broader economic improvement post-pandemic.
JSE:SHP
by PDSnetSA
Our opinion on the current state of SHPShoprite Holdings Limited, as Africa's preeminent grocery retailer and consumer goods company, has exhibited remarkable resilience and strategic acumen in navigating the complex landscape of the African retail sector. Despite the challenges posed by intense price competition, which has restricted the ability of supermarkets to pass on price increases to consumers, Shoprite's share price has shown a robust recovery from its low in July 2020, around R100, climbing from its March 2018 high of R275. This rebound is a testament to the company's operational strength and its potential to capitalize on improvements within the South African and broader African economy. The strategic decisions by Christo Wiese, Shoprite's Chair, to reduce his direct stake to just over 10% of the ordinary shares while retaining 265 million deferred shares, granting him 42% control, reflect significant shifts in the company's ownership structure. Furthermore, Shoprite's strategic exits from Uganda, Madagascar, Nigeria, and Kenya, alongside the acquisition of 56 Cambridge and Rhino food stores from Massmart, indicate a focused approach to refining its operational footprint and enhancing its market position. The COVID-19 pandemic's long-term impact on the global and African economies underscores a potential uplift in consumer spending, which Shoprite is well-positioned to benefit from as the continent's largest supermarket chain. The company's resilient performance amid challenges such as looting, fire damage to 119 of its stores, and the unprecedented costs incurred from load-shedding — including significant diesel expenses to maintain operations — highlights its operational efficiency and commitment to customer savings and service excellence. For the 52-week period ending on 2nd July 2023, Shoprite's reported 16.9% increase in sales and 9.6% rise in HEPS further emphasize its strong market position and ability to grow profits and dividends despite adverse conditions. The operational update for the three months ending 30th September 2023, showcasing a sales increase of 13.2% and a market share gain, illustrates ongoing positive momentum. Recent reports, including the merchandise sales growth and the expansion through the integration of Massmart's Rhino and Cambridge Foods businesses, reflect strategic moves to solidify Shoprite's dominance in the retail market. The share price's substantial appreciation since breaking above its 200-day moving average in September 2020 reinforces the view that Shoprite remains undervalued, offering a compelling investment opportunity. In conclusion, Shoprite's strategic management, adaptability to challenging market conditions, and strong growth prospects amidst the evolving economic landscape position it as an attractive investment. The company's capacity to increase market share, turnover, and earnings amidst operational challenges highlights its potential for continued success in the African retail sector.
JSE:SHP
by PDSnetSA
Our opinion on the current state of SHPShoprite Holdings Limited, as Africa's preeminent grocery retailer and consumer goods company, has exhibited remarkable resilience and strategic acumen in navigating the complex landscape of the African retail sector. Despite the challenges posed by intense price competition, which has restricted the ability of supermarkets to pass on price increases to consumers, Shoprite's share price has shown a robust recovery from its low in July 2020, around R100, climbing from its March 2018 high of R275. This rebound is a testament to the company's operational strength and its potential to capitalize on improvements within the South African and broader African economy. The strategic decisions by Christo Wiese, Shoprite's Chair, to reduce his direct stake to just over 10% of the ordinary shares while retaining 265 million deferred shares, granting him 42% control, reflect significant shifts in the company's ownership structure. Furthermore, Shoprite's strategic exits from Uganda, Madagascar, Nigeria, and Kenya, alongside the acquisition of 56 Cambridge and Rhino food stores from Massmart, indicate a focused approach to refining its operational footprint and enhancing its market position. The COVID-19 pandemic's long-term impact on the global and African economies underscores a potential uplift in consumer spending, which Shoprite is well-positioned to benefit from as the continent's largest supermarket chain. The company's resilient performance amid challenges such as looting, fire damage to 119 of its stores, and the unprecedented costs incurred from load-shedding — including significant diesel expenses to maintain operations — highlights its operational efficiency and commitment to customer savings and service excellence. For the 52-week period ending on 2nd July 2023, Shoprite's reported 16.9% increase in sales and 9.6% rise in HEPS further emphasize its strong market position and ability to grow profits and dividends despite adverse conditions. The operational update for the three months ending 30th September 2023, showcasing a sales increase of 13.2% and a market share gain, illustrates ongoing positive momentum. Recent reports, including the merchandise sales growth and the expansion through the integration of Massmart's Rhino and Cambridge Foods businesses, reflect strategic moves to solidify Shoprite's dominance in the retail market. The share price's substantial appreciation since breaking above its 200-day moving average in September 2020 reinforces the view that Shoprite remains undervalued, offering a compelling investment opportunity. In conclusion, Shoprite's strategic management, adaptability to challenging market conditions, and strong growth prospects amidst the evolving economic landscape position it as an attractive investment. The company's capacity to increase market share, turnover, and earnings amidst operational challenges highlights its potential for continued success in the African retail sector.
JSE:SHP
by PDSnetSA
Our opinion on the current state of SHPShoprite Holdings Limited (SHP), recognized as Africa's largest grocery retailer and consumer goods company, has navigated a complex retail environment marked by intense price competition that has historically constrained supermarkets from passing on price increases to consumers. Despite experiencing a significant downturn in its share price from a high of R275 in March 2018 to around R100 in July 2020, Shoprite has demonstrated a robust recovery, indicative of its fundamental strength and the pivotal role it plays in the African retail market. The company's strategic operations have been highlighted by a significant reduction in Christo Wiese's direct stake to just over 10% of the ordinary shares, although his ownership of 265 million deferred shares continues to afford him substantial control over the company. Shoprite's strategic divestments from Uganda, Madagascar, Nigeria, and Kenya, coupled with the acquisition of 56 Cambridge and Rhino food stores from Massmart, underscore its focused approach to optimizing its operational footprint and consolidating its market presence in regions with the highest growth potential. The adverse impacts of the COVID-19 pandemic, along with the subsequent unrest and looting incidents that severely affected 119 of its stores, have posed significant challenges. However, Shoprite's resilience is evident in its ability to report a 16.9% increase in sales and a 9.6% rise in headline earnings per share (HEPS) for the 52 weeks ending 2nd July 2023. These achievements reflect the company's market share gains, substantial savings offered to customers, and effective management strategies amidst challenging conditions, including unprecedented levels of load-shedding. Further operational updates for the three months ending 30th September 2023 showcased a 13.2% increase in sales and a notable gain in market share, despite the considerable diesel expenses incurred to operate generators across its South African supermarket business. This period also highlighted the integration of the Rhino and Cambridge Foods businesses from Massmart, adding 94 stores to Shoprite's portfolio, reinforcing its market leadership and expansion strategy. Recent reports, including a Business Day article dated 6th March 2024, indicate that Shoprite has continued to increase its market share and turnover, with a 12.9% rise in the latter and a 7.6% increase in HEPS to 621c for the six months ending 31st December 2023. These developments affirm the company's ongoing growth trajectory and operational success. Technically, Shoprite's performance has been commendable, with the share price breaking above its 200-day moving average on 2nd September 2020, trading at 11696c, and appreciating to 25876c — a gain of 121% in approximately 3.5 years. This upward trend underscores Shoprite's value proposition and its attractiveness as an investment, especially considering its strategic positioning within the African retail sector and its potential to benefit further from economic recovery post-COVID-19. Given these factors, Shoprite remains a compelling investment opportunity, particularly for those seeking exposure to the retail and consumer goods sector in Africa.
JSE:SHP
by PDSnetSA
Our opinion on the current state of SHPShoprite (SHP) is the largest grocery retailer and consumer goods company in Africa. Intense price competition has prevented supermarkets from passing on price increases to consumers. The share price was hammered down from a high of R275 in March 2018 to levels around R100 in July 2020 but has since recovered strongly. We expect it to benefit directly from any improvement in the South African economy. Chair, Christo Wiese's major stake in Shoprite has been reduced to just over 10% of the ordinary shares, but he still holds 265m deferred shares which effectively gives him 42% control of the company. The company has exited from Uganda and Madagascar in addition to Nigeria and Kenya which it exited earlier. The company agreed to buy 56 Cambridge and Rhino food stores from Massmart. The South African economy and the African economy are likely to improve once the COVID-19 pandemic becomes history and the recovery in the American and world economies resumes. In time, this must impact on consumer spending and benefit Africa's largest supermarket chain. In a report on the unrest and looting the company said, "Of the 1 189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper banners, 119 stores (69 Shoprite, 44 Usave and six Checkers, including one Checkers Hyper) have been severely impacted as a result of looting and/or fire damage". In its results for the 52 weeks to 2nd July 2023 the company reported sales up 16,9% and headline earnings per share (HEPS) up 9,6%. The company said, "The Group gained record levels of market share, saved customers over R13.5 billion in Xtra Savings and still managed to increase profits and dividends, despite the prohibitive cost to the business as a result of unprecedented levels of load-shedding". In an operational update for the 3 months to 30th September 2023 the company reported sales up 13,2% and market share up 1,24%. The company said, "...the diesel expense to operate generators across our South African supermarket business during the first quarter amounted to R281 million." On 31st January 2023 Business Day reported that Shoprite merchandise sales for rose 14% in the last six months of 2023 and 6,3% on a like-for-like basis. During the period Shoprite took over Massmart's Rhino and Cambridge Foods businesses adding 94 stores. We continue to believe that Shoprite is cheap even at current levels. Technically, we drew attention to the fact that the share had broken above its 200-day moving average in the Confidential Report on 2nd September 2020. The share was then trading for 11696c. Since that time, the share has appreciated to 27200c - a gain of 132% in 3.5 years.
JSE:SHP
by PDSnetSA
Flagging the Bulls: Breaking Out from a Falling Flag Formation!Shoprite Flagging the Bulls: Breaking Out from a Falling Flag Formation! 1.Price Formation: The price has broken out from a falling flag price formation on a daily chart. 2.Moving Averages: The 7-day moving average (MA) is above the 21-day MA, which is a positive sign indicating bullish momentum. 3.200-day Moving Average is below the Price. 4.Thus, Mas 7>21>200 5.Relative Strength Index (RSI): The RSI is > than 50, indicating bullish momentum and potential further upward movement. 6.Price Target: R287.50 Shoprite in South Africa is a major retail chain and is part of the Shoprite Group of Companies, which is the largest food retailer in Africa. The Shoprite Group also owns other retail formats and brands including Checkers, Usave, and LiquorShop, among others. Shoprite South Africa had a strong presence in the country with hundreds of outlets, serving millions of customers with a wide variety of food products, general merchandise, and non-perishable groceries. The brand is known for its value-for-money offerings and targets a broad consumer market, ranging from lower-income shoppers to the more affluent. In addition to South Africa, the Shoprite Group also operates in several other African countries, and it has made considerable investments in supply chain infrastructure to serve the African continent effectively. The Group is known for its aggressive pricing strategy and has been quite active in initiatives that address food security and support for local suppliers and communities. It has also implemented various sustainability measures to enhance its environmental responsibility.
JSE:SHPLong
by Sahle
1
Our opinion on the current state of SHPShoprite (SHP) is the largest grocery retailer and consumer goods company in Africa. Intense price competition has prevented supermarkets from passing on price increases to consumers. The share price was hammered down from a high of R275 in March 2018 to levels around R100 in July 2020 but has since recovered strongly. We expect it to benefit directly from any improvement in the South African economy. Chair, Christo Wiese's major stake in Shoprite has been reduced to just over 10% of the ordinary shares, but he still holds 265m deferred shares which effectively gives him 42% control of the company. The company has exited from Uganda and Madagascar in addition to Nigeria and Kenya which it exited earlier. The company agreed to buy 56 Cambridge and Rhino food stores from Massmart. The South African economy and the African economy are likely to improve once the COVID-19 pandemic becomes history and the recovery in the American and world economies resumes. In time, this must impact on consumer spending and benefit Africa's largest supermarket chain. In a report on the unrest and looting the company said, "Of the 1 189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper banners, 119 stores (69 Shoprite, 44 Usave and six Checkers, including one Checkers Hyper) have been severely impacted as a result of looting and/or fire damage". In its results for the 52 weeks to 2nd July 2023 the company reported sales up 16,9% and headline earnings per share (HEPS) up 9,6%. The company said, "The Group gained record levels of market share, saved customers over R13.5 billion in Xtra Savings and still managed to increase profits and dividends, despite the prohibitive cost to the business as a result of unprecedented levels of load-shedding". In an operational update for the 3 months to 30th September 2023 the company reported sales up 13,2% and market share up 1,24%. The company said, "...the diesel expense to operate generators across our South African supermarket business during the first quarter amounted to R281 million." We continue to believe that Shoprite is cheap even at current levels. Technically, we drew attention to the fact that the share had broken above its 200-day moving average in the Confidential Report on 2nd September 2020. The share was then trading for 11696c. Since that time, the share has appreciated to 24800c - a gain of 112% in just over 3 years.
JSE:SHP
by PDSnetSA
$JSESHP - Shoprite: Best Dip Since The May Bottom, Is It A Buy?See link below for previous analysis. Shoprite had a strong 39% five wave rally from the May low of 19165 to 26659. This strong rally had very shallow dips which showed the underlying strength and momentum in the stock. From 26659 to 23330, the stock has made a textbook -12.5% three wave zigzag correction which is the biggest dip from the May low. This pullback caught a bid within the 38.2%-50% Fibonacci Retracement zone. Long positions should use 23330 as an invalidation level.
JSE:SHPLong
by Loyiso_BlaqueSoros_Mpeta
Our opinion on the current state of SHPShoprite (SHP) is the largest grocery retailer and consumer goods company in Africa. Intense price competition has prevented supermarkets from passing on price increases to consumers. The share price was hammered down from a high of R275 in March 2018 to levels around R100 in July 2020 but has since recovered strongly. We expect it to benefit directly from any improvement in the South African economy. Chair, Christo Wiese's major stake in Shoprite has been reduced to just over 10% of the ordinary shares, but he still holds 265m deferred shares which effectively gives him 42% control of the company. The company has exited from Uganda and Madagascar in addition to Nigeria and Kenya which it exited earlier. The company agreed to buy 56 Cambridge and Rhino food stores from Massmart. The South African economy and the African economy are likely to improve once the COVID-19 pandemic becomes history and the recovery in the American and world economies resumes. In time, this must impact on consumer spending and benefit Africa's largest supermarket chain. In a report on the unrest and looting the company said, "Of the 1 189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper banners, 119 stores (69 Shoprite, 44 Usave and six Checkers, including one Checkers Hyper) have been severely impacted as a result of looting and/or fire damage". In its results for the 52 weeks to 2nd July 2023 the company reported sales up 16,9% and headline earnings per share (HEPS) up 9,6%. The company said, "The Group gained record levels of market share, saved customers over R13.5 billion in Xtra Savings and still managed to increase profits and dividends, despite the prohibitive cost to the business as a result of unprecedented levels of load-shedding". We continue to believe that Shoprite is cheap even at current levels. Technically, we drew attention to the fact that the share had broken above its 200-day moving average in the Confidential Report on 2nd September 2020. The share was then trading for 11696c. Since that time, the share has appreciated to 24441c - a gain of 109% in 3 years.
JSE:SHP
by PDSnetSA
SHP Shoprite (SHP) Further Update. I discussed the share on Monday as well as on Friday 25 August, with my comments centering around the fundamental valuation and technical positioning. I also published my view on this platform last week Monday 28 August (see attached post). At 23x earnings (p/e ratio) and a 9% increase in headline earnings per share, the mismatch of fundamental rating (expensive) and (tepid) growth saw the share down by over 6% at one point yesterday. Today, we are seeing further weakness with the share now below R240. For more research insights, including trade ideas, get in touch today.
JSE:SHP
by techpers
Shoprite Showing Cautious BuyersShoprite is finding little buyers as price nears all-time high, we can see volume dropping as price pushes higher. On indicators, worrying signs are beginning to develop: 1. TSI & RSI are putting negative divergence. 2. The RSI is showing overbought and beginning to turn. This is not an ideal place for one to go long, we need the indicators to reset which is likely at a weekly low point. For now there might be a push for price to go near all-time highs to allow institutions to get out. Retail investors are best to sit this one out.
JSE:SHP
by runyamhere
Shoprite (SHP): Against Strong ResistanceShoprite price action favours a bearish turn, for the following reasons: 1. The R250 area is strong resistance, many bulls were trapped here in 2018, they will want out. 2. It is late in the weekly cycle so price must find its way to the bottom, for we expect price to go below R223.36 at least. 3. The pink downward slopping trendline is adding to the gravity forcing price downwards. Within a daily timeframe, Shoprite still has time to attempt another go at R250 level but that would be to trigger stops on some short, the brave will use such opportunities to scale in.
JSE:SHPShort
by runyamhere
SHPShoprite Holdings (SHP). Fundamental Valuation: At 23x Earnings, It's Expensive, But Not Excessive. Considering the quality of the business/management and the fact that it's continuing the grow it's market share, the share deserves it's premium fundamental rating. That being said, the technical reward-to-risk has become less and less appealing for the short term traders. I previously highlighted the share at R203 when it traded at the lower boundary of the channel and well below it's 50/100-EMA range, which was the major technical signal that the share was excessively oversold at the time. We are now seeing the opposite with the price at the upper boundary of the channel and around 9% above the mid-point of the 50/100-EMA range i.e. the 75-day EMA. At at the time of writing (just before the close on Friday), the share is print a bearish engulfing candle, with a minor divergence on both the MACD and 14-Day RSI. Early days, but this might be shaping up for a short/sell.
JSE:SHP
by techpers