Shoprite Holdings raised its profit outlook this week after its on-demand grocery delivery service posted another year of steep growth. The Johannesburg-based company, Africa’s largest supermarket operator, told investors in a regulatory filing Wednesday that headline earnings per share from continuing operations could climb as much as 14.7% for the fiscal year that ended June 28. Headline earnings per share is a South African profit measure roughly equivalent to adjusted earnings per share in the United States. It strips out one-time gains and losses to show how a company’s core business performed over the year.
The gain traces mainly to Sixty60, the smartphone app Shoprite built to compete with the quick-delivery services that have reshaped grocery shopping worldwide. Sixty60 lets customers order groceries and household goods for delivery within about an hour. Revenue from the service jumped 34.5% to 25.5 billion rand, or roughly $1.6 billion, over the fiscal year. That pace has outrun growth at Shoprite’s traditional stores for several years running.
The jump reflects a broader shift in which on-demand delivery, once treated as an add-on to physical grocery stores, has become a central driver of profit at major retailers even in markets outside the United States and Europe. South African households have adopted app-based grocery delivery quickly as smartphone use has spread and heavy traffic in cities like Johannesburg has made home delivery more appealing than in-store shopping. Shoprite shares trade on the Johannesburg Stock Exchange, where investors have watched the company’s digital arm grow into its own business.
Shoprite has not yet released full financial results for the year, which typically follow in the coming weeks with more detail on store sales, pricing and profit margins across its supermarket chains. Wednesday’s filing gives investors an early look at how quick-commerce operations are reshaping profit at legacy grocery chains before the fuller report arrives.
Sorry, comments are closed for this post.