Shoprite Holdings Ltd. is the largest supermarket and retail company in Africa. It is currently considered one of the best international stocks in emerging markets and the current best stock in African capital markets. The company is listed as a public company on the Johannesburg Stock Exchange (JSE). It has 3,152 stores across Africa with an annual revenue of R108 billion ($5.89 billion). Moreover, the company employs more than 152,000 people and it is the biggest private-sector employer in South Africa. What made Shoprite Holdings the best African company to currently invest in?
Shoprite has recently announced a rebrand of its Checkers Food Services (CFS) business in South Africa, which provides wholesale services in Gauteng and the Western Cape. The rebranded firm is now called Red Start Wholesale Catering Services and expanded its delivery network to include KwaZulu-Natal, specifically Amanzimtoti, Ballito, Bluff, Chatsworth, Durban CBD, Durban North, Hillcrest, Pinetown, and Umhlanga. More importantly, the firm provides free delivery on orders over R1,000 ($54.50) and delivers six days a week, from Monday to Saturday, using refrigerated, temperature-controlled vehicles.
In the six months to January 1, Shoprite reported a 16.8% increase in sales at the group level, while supermarket sales in its core South Africa increased by 17.5%. Its South African business accounts for 80.1% of group sales. What makes Shoprite so attractive as a company that consistently thrive is its discount model. Indeed, to attract shoppers amid aggressive price competition from rivals Pick n Pay and upmarket operator Woolworths, it offered discounts of R7 billion ($381 million) at Shoprite and Checkers stores in addition to holiday days. Although these offerings hurt their profit margins, the company owners believe that it benefits the corporation in the long-term as it would increase its shareholder value.
The United Nations predicts Africa will account for more than half of global population growth through 2050, and Shoprite Holdings, as the continent’s largest grocery chain positions it to benefit from economic and demographic tailwinds.