[LISTEN] Shoprite_SA released its full-year results yesterday and the market didn't quite approve. CEO PieterEngelbrecht joined FifiPeters to discuss what was behind this reaction. Listen to the SAfmRadio MarketUpdate podcast
Shoprite, the biggest retailer in Africa, released its annual results earlier today. Management said they were pretty pleased with the group’s performance this time around, which showed the Shoprite customer spending an additional R19.6 billion across the group’s 1 789 stores. But it seems the market had a different opinion of Shoprite’s performance to that of management, if the stock price is anything to go by.
Well, we maintained our gross profit margin of 24.5% of last year, and stayed the cheapest supermarket in South Africa. We are sitting at a 6.8% trading margin, which I think globally compares very favourably. And even comparing that to our competitors in the SA environment there’s quite a large margin of difference. So I think the kudos here for us to take away is to maintain the gross profit margin and the trading margin.
All right. So 10% internal inflation. Are you saying that the price of your basket is going up by 10%, or went up by 10% this time around? My answer there would probably be referring to the 24 million customers that we now have from the Xtra Savings programme, which gives us a great wealth of data and insights. These days it’s much more scientific for us to determine what customers want, when they want it, and what that price sensitivity is around the category or specific products. We use that to help us manage the margin.
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