Nigeria store closures shoots down Shoprite Holdings’ revenue targets

shoprite

Africa’s largest supermarket chain, Shoprite Holdings, said its revenue targets for the half-year period fell below its benchmark due to devaluations and store closures in Nigeria.

It could be recalled that Shoprite alongside major South African retailers was attacked in Nigeria in the wake of xenophobic attacks on Nigerians and other African nationals in South Africa.

Shoprite which owns more than 2,800 outlets across Africa, said diluted headline earnings per share (HEPS) fell by 2.6% to 372.4 cents in the 26 weeks ended Dec. 29 from 382.4 cents a year earlier. Analysts polled by Refinitiv had expected HEPS of 463 cents.

HEPS is the most widely watched profit gauge in South Africa, which strips out certain one-off items.

The owner of Checkers and Usave retail chains said it is battling with currency devaluations in Angola, Zambia and Nigeria.

Store closures in Nigeria and subsequent reduction in customer count, both during and after the September attacks on foreigners, “resulted in a difficult half with sales declining by 8.1% in constant currency terms”, the company added.

This saw sales in rand terms in the group’s international operations, comprising 14 African countries, decline by 3.1%. In constant currency terms, sales rose 4.8%.

Trading profit at its African operations plunged 62.3% on the back of a 68 million rand reduction in interest income earned on government bonds and bills.

This was mainly due to Angola Treasury Bills that reached maturity during the reporting period, it added.

The group’s core business, Supermarkets South Africa, was the star performer. Sales rose by 9.8% on an overall basis and 6.6% on a like-for-like basis, boosted by strong liquor sales and its strategy to grow its share of spend in the mid-to-upper segment of the market under its Checkers brand.