(Adds details)
JOHANNESBURG, Jan 31 (Reuters) - South Africa's biggest
supermarket group Shoprite reported a 16.8% jump in
half year sales on Tuesday, supported by a record Black Friday
and festive season as both cash-strapped shoppers and upmarket
consumers went after deals.
Shoprite's duel discount and upmarket grocery model tends to
shield it better than rivals against high inflationary pressures
as it targets millions of South Africans reliant on government
grants as well as affluent shoppers with much bigger budgets.
To attract shoppers amid aggressive price competition from
rivals Pick n Pay and upmarket Woolworths , it
offered discounts of 7 billion rand ($402 million) at Shoprite
and Checkers stores in addition to holiday deals, it said.
But the offerings would hurt margins of its South Africa
supermarkets business, the company said.
"This together with the impact of the approximate 56%
year-on-year increase in fuel price on our supply chain
operations will result in...marginally lower gross margin for
the period," Shoprite added.
The retailer, with over 2,100 stores across Africa, said
group sales for the six months ended Jan. 1 jumped to 106.3
billion rand ($6.10 billion). Second quarter sales rose by
15.2%.
The group's core business, Supermarkets South Africa, which
contributes up to 80% to the topline, grew sales by 17.5%, with
like-for-like sales growth of 11.1%.
Internal selling price inflation for the period was much
higher than a year ago, measuring 9.4%, reflecting the group's
exposure to commodities such as wheat, where selling price
inflation has been notably higher, it said.
Its rest of Africa business grew sales by 17.5% in rand
terms.
($1 = 17.4260 rand)
(Reporting by Nqobile Dludla
Editing by Promit Mukherjee and Louise Heavens)
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