Shoprite has reported that sales (denominated in South African Rand – ZAR) in its supermarkets outside of its native South Africa plunged 13.3% year-on-year during the second half of 2018. In constant currency terms (excluding the effect of foreign currency fluctuations), they were flat – rising by 0.1%.
Angola, a petro-economy wracked by weak oil prices, remains Shoprite’s main source of concern, with sales there plunging 45% (9.9% in constant currency terms) during the second half of 2018. Excluding this market, the retailer’s sales outside of South Africa actually rose by 0.6% (4.4% in constant currency terms). Nigeria and Zambia were the star performers, with sales in these two markets rising by 8.5% and 11%, respectively, in constant currency terms.
Shoprite currently operates more than 240 supermarkets under its Shoprite, Usave and Checkers banners in 16 African markets outside of South Africa. While others have hesitated or tentatively dipped a toe into the turbulent waters of African markets, Shoprite has plunged in. It has made a long-term bet on Africa’s emerging middle class and seems intent to double down on it. However, having opened its first store in Kenya during December, it is may shift its growth strategy towards more stable East African markets in the short to medium term.
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