Strong Fundamentals Position Shoprite for Renewed Growth – JSE: SHP Share Price Starts Rebound
Shoprite Holdings’ shares have shown resilience after a challenging year, with solid fundamentals and market leadership supporting signs...
Quick overview
- Shoprite Holdings has demonstrated resilience with a strong recovery in share price following a challenging year.
- The company has consistently grown earnings and expanded its store network, marking five consecutive years of market share gains.
- Shoprite is focusing on core supermarket operations by divesting non-core businesses and investing in innovative technologies like AI-powered shopping carts.
- Despite economic pressures, Shoprite's scale and financial strength position it well for continued growth in the retail sector.
Shoprite Holdings’ shares have shown resilience after a challenging year, with solid fundamentals and market leadership supporting signs of a recovery.
Share Price Performance
Since 2020, Shoprite’s share price has staged a remarkable rally, climbing from below R100 to a peak above R31.30 in late 2024. However, the first quarter of 2025 brought a steep 24% decline to around R23.50. Technical support at the 50-week simple moving average (SMA) provided a platform for recovery, though the rebound faced headwinds from consumer frustration over rising food prices and boycott threats.
SHPJ Chart Monthly – The 50 SMA Is Holding As Support
By August 2025, the 50 SMA again acted as a key support level, reinforcing investor confidence and signaling potential continuation of the broader uptrend.
Operational Strength
Shoprite has consistently grown its earnings, expanded store networks, and maintained strong supermarket performance. Its Sixty60 delivery platform saw impressive adoption, while disciplined capital allocation and share buybacks highlighted its commitment to shareholder value. The retailer has now marked its fifth consecutive year of market share gains, cementing its leadership in African retail.
Strategic Adjustments
The group has streamlined operations by divesting furniture businesses in Angola and Mozambique, with ongoing sales processes in Malawi and Ghana. Legal delays have slowed the sale of its furniture arm to Pepkor, yet Shoprite remains confident these exits will be completed. These moves reflect a sharper focus on core supermarket operations.
Innovation and Technology
Through its ShopriteX innovation unit, the company has piloted the Xpress Trolley in Cape Town—an AI-powered shopping cart that allows customers to scan items, track totals, and pay without queueing. Shoprite, South Africa’s largest corporate employer, emphasized that no jobs are at risk from the rollout of this technology.
Shoprite Delivers Strong Growth with Rising Earnings, Sales Momentum, and Expansion
Earnings Growth
- Diluted headline earnings per share (HEPS) projected to rise between 15.2% and 25.2% for the 52 weeks ending June 29.
- HEPS expected to land between 1 367.1 and 1 485.7 cents, reflecting a strong upward trajectory.
Revenue and Sales Performance
- Total merchandise sales projected to grow 9% to R262.3 billion.
- Continuing operations sales expected to rise 8.9% to R252.7 billion.
- Supermarkets RSA: Full-year sales surged 9.5%, contributing 84.5% of total group sales.
- RSA segment recorded R195.04 billion in H2 sales, up 8.5%.
- Non-RSA supermarkets: Sales rose 7.6% in H2, reaching R19.33 billion.
- Other operations (including franchises): Sales up 3.5%, totaling R17.72 billion.
Store Expansion and Operations
- Added 194 new main banner supermarkets during the year.
- Openings included 43 Shoprite, 38 Usave, 29 Checkers, plus liquor and specialty outlets.
- Franchise arm OK Franchise achieved 6.7% sales growth, with a net addition of 7 stores, ending at 615 outlets.
Digital and Online Growth
- Online delivery platform Sixty60 sales surged 47.7%, reflecting strong consumer adoption of digital channels.
Shareholder Value Initiatives
- Repurchased R997 million in shares during H1, underlining shareholder engagement.
- No buybacks were conducted in H2.
Outlook: Despite retail pressures and consumer shifts to smaller, cheaper stores, Shoprite’s scale, innovation, and financial strength position it well for sustained growth. The company is navigating economic challenges with resilience, reinforcing its role as the dominant force in South African retail while preparing for the next phase of expansion.
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