Shoprite Holdings, South Africa’s largest grocery retailer, reported a 7.7% increase in half-year profit on Tuesday, supported by strong festive season demand, and said it expects low selling price inflation to continue for the rest of its financial year.
The company said headline earnings per share from continuing operations rose to 710.5 cents in the six months ended December 28, 2025, up from a restated 659.8 cents a year earlier.
Earnings before interest, income tax, depreciation and amortisation (EBITDA) increased by 6.7% to 12.4 billion rand ($767 million), according to Reuters.
However, gross margin declined by 10 basis points to 23.8% as slowing food price inflation continued to weigh on South African grocers.
Shoprite said its lower selling prices also pressured margins at a time when operating costs were rising. By 0950 GMT, the company’s shares were 3.21% lower at 260 rand.
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Despite the margin decline during the period, Shoprite said it expects its gross profit margin for the full year ending in June to range between 23.9% and 24.2%.
Sales growth moderated as the retailer passed more than 1 billion rand worth of discounts on to consumers facing financial pressure.
CEO Pieter Engelbrecht told investors that a record 14,400 items were cheaper in December 2025 compared with December 2024.
Internal selling price inflation in Shoprite’s South African supermarkets slowed to 0.7% during the reporting period, compared with official food inflation of 4.7%.
Group sales rose 7.2% to 136.8 billion rand, with South African supermarket sales increasing 7.1%, driven by a 5.6% rise in customer visits and higher product volumes sold, Engelbrecht said. In the first month of the second half, sales in South African supermarkets grew by 7.5%.
“In terms of the remainder of our second-half 2026 period, we are of the view that low single-digit selling price inflation is likely to be sustained,” the retailer said.
Shoprite declared an interim dividend of 307 cents, up 7.7%.
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Image Credit: Nairametrics
