Load shedding still tearing away at South Africa’s biggest retailer

South Africa’s biggest retailer, Shoprite, says it is spending close to R94 million a month on diesel to keep its operations going amid continued load shedding.

In a voluntary trading update for the first quarter of its financial year (July to September 2023), the group said that its diesel bill for the three-month period had risen by R90 million to R281 million.

The sharp increase in costs was attributed to the higher diesel price over the period relative to the same quarter last year.

Reporting its full-year results for year ended June, Shoprite flagged a total diesel spend of R1.3 billion for the year to counteract the impact of load shedding.

The R281 million spent in just Q1 is already more than that total spent in the 2022 full-year (R226 million) and equates to over R3 million a day.

Operational upside

Despite the continued pressure from load shedding, Shoprite said that its operations are showing positive strides.

The group’s core Supermarkets RSA segment, the majority of which is represented by Shoprite, Usave, Checkers, Checkers Hyper and LiquorShop increased sales for the first quarter by 13.3%, it said.

Internal selling price inflation for the first quarter measured 8.3%.

“Market share for the 52 weeks ending September 2023 increased by 124 basis points versus the corresponding period last year, extending the period of uninterrupted market share gains in our core South African supermarket business to 55 months,” the group said.

The group is also continuing to expand, with a net 42 store openings in the last three months, including two Checkers, six Shoprite, five Usave, 18 LiquorShop, eight Petshop Science, two UNIQ by Checkers and two Checkers Outdoor.

The group’s said its core Supermarkets RSA operating segment is on track to open its planned 195 new stores for the 2024 financial year.

Read: South Africa’s biggest retailer is spending R3.5 million a day to beat load shedding