Largest African Food Retailer Jumps Most Since 1997 After Gains

(Bloomberg) -- Shoprite Holdings Ltd. rallied the most in 22 years after Africa’s largest food retailer said second-half sales climbed as it took market share.

• Sales in the second half rose 6.5% as its core South African business returned to full operational strength, the Cape Town-based supermarket operator said in a statement on Tuesday.

Key Insights

• The owner of chains including Checkers and U-Save introduced a new IT system and faced some industrial action in its first-half. In the second six months, product availability improved significantly and surpassed levels that it had before the new system was installed.
• Shoprite has more than 2,500 stores throughout Africa, but a considerable majority are in South Africa. The retailer plans to open 88 stores in the next year.
• Elsewhere in Africa, Shoprite is also seeing positive momentum after problems such as currency devaluations and shortages drove up costs. Shoprite says it’s still optimistic about the long-term food retail opportunity on the continent.

Market reaction

• The stock rallied as much as 15%, the biggest intraday gain since Oct. 29, 1997 and traded 9% higher as of 9:53 a.m. in Johannesburg. Before today’s statement, the shares had dropped 32% this year.

Get More

• For more details on the news, click here
• Africa’s Biggest Grocer Slumps Most Since 1999 on Profit Warning

To contact the reporters on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net;Alastair Reed in Edinburgh at areed12@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Viljoen, Hilton Shone

©2019 Bloomberg L.P.