Shoprite Sales Growth Slows as South African Liquor Bans Weigh
(Bloomberg) -- Shoprite Holdings Ltd. reported slower first-half sales growth after South Africa’s alcohol bans cut revenue at the liquor shops of the country’s biggest grocer.
Sales at the local supermarkets business, which accounts for the bulk of Shoprite’s income, climbed 5.6% in the six months through Dec. 27, the Cape Town-based company said in a statement Monday. That compares with 9.8% a year earlier. LiquorShop revenue fell 22% over the same period.
South Africa has used a succession of liquor bans to reduce alcohol-related cases at hospital trauma wards and help the health system cope with the coronavirus pandemic. The second and third prohibitions were imposed during the height of two separate peaks in mid-July and late December.
Even when outright bans were lifted, alcohol sales were often closed for trade on Fridays and weekends. That meant Shoprite’s LiquorShop unit lost 79 trading days the six months, the company said.
The shares climbed 2.4% as of 9:45 a.m. in Johannesburg, valuing the company at 87 billion rand ($6 billion).
Operations in the rest of Africa are still struggling, with sales dropping by 8.4% in rand terms due partly to weak consumer-spending power and Covid-19 lockdowns.
Shoprite has been reviewing these operations for more than a year and limiting future expansion in the rest of Africa.
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