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Shoprite was looking to expand beyond Africa as it pursued fast-growing markets and could get involved on “two more continents”, CEO Whitey Basson said this week.
Vietnam and Cambodia were examples of markets that looked interesting to Shoprite, Basson told Bloomberg, while the company would consider India if the country further opened up its retail sector to foreign investors.
Shoprite operated in 15 African countries, which gave it access to 500 million people and R15 trillion in gross domestic product, Basson said.
In the year to June, Shoprite’s number of stores across its brands grew to 2 711 – up from 2 560 stores at the end of June last year.
During the 12 months to June 2016, Shoprite’s capital expenditure was R4.8 billion, up from R4.6 billion in the previous year.
In contrast, Woolworths spent R3.1 billion in capital in the year to June, up from R2.8 billion in the year to June 2015. In the year to June 2017, Woolworths is planning R3.9 billion in capital expenditure.
Massmart spent almost R800 million in capital expenditure for the year to June across its 405 stores. By June 2017, Massmart is planning to open 35 shops to take its store count to 440.
Turning back to Shoprite, retail in the year to June completed a record 1 billion transactions and the company sold 6.6 billion items.
An estimated 29.1 million South African shoppers, or 76% of the local adult population, visited Shoprite stores, which Basson said was more than double Shoprite’s nearest competitor.
In the year, Shoprite created 4 833 jobs to take its total employee count to 137 775.
Shoprite’s stores outside South Africa generated trading profit that exceeded R1 billion for the first time.
Basson said that the tougher Africa gets, the bigger Shoprite’s advantage grows.
“Supply line and global source expertise put us ahead of the opposition. Access to dollars allows us to have stock on-shelf. More than 200 supermarket locations [in the rest of Africa] make us harder to catch,” he added.
In the year to June 2017, Shoprite is planning to open 81 stores and in the year to June 2018, the company is looking at 84 new shops.
Basson said online players such as Amazon.com were a big threat and online shopping would hit the African retail scene at some point.
To this end, Shoprite has hired one of the best specialist in internet retail.
Angola, Nigeria and Zambia were all facing foreign exchange shortages. Shoprite was getting around the shortages in Angola by supplying the country out of South Africa.
At Massmart, the retailer said its growth into Africa had been led by Game and Builders Warehouse.
“Since June 2015, we have opened four new stores in three countries. We will open four more stores to June 2017,” Massmart said.
Massmart has four key priorities: improve profitability; grow its retail formats in South Africa; grow in Africa; and grow its online retail offering.
According to Massmart, its food and liquor sales were growing ahead of the local market.
Builders Warehouse annualised sales in the rest of Africa had exceeded R1 billion, Massmart said.
Massmart has 38 stores in 13 African countries, which makes up just over 9% of its sales.
Massmart anticipates opening five new stores over the next two years in Ghana, Mozambique, Nigeria and Zambia.
