You can read the transcript of the interview below, or listen to the podcast on iono.fm .

JIMMY MOYAHA: Bright and early at eight o’clock this morning, Africa’s largest retailer – not just South Africa’s largest – Africa’s largest grocery retailer in the form of the Shoprite Group released an update on their . If the numbers are anything to go by, this is going to be a very interesting conversation.

Revenue figures topped the R250 billion mark. Alongside this, more than R16 billion in savings was returned to customers.

The 500^th Usave store opened in South Africa alone. Those are just some of the figures that we’re going to get into with the chief executive officer of the Shoprite Group, Pieter Engelbrecht.

He joins me now to take a look at the performance of the business and see what we make of it. Oom Peter, always lovely catching up… It seems every time we have this conversation, there’s always something new and there’s always something that surprises me in the numbers.

Let’s start with your thoughts around the performance of the business over the last year, and then we’ll get into some of those numbers that I found quite surprising.

PIETER ENGELBRECHT: Okay, Jimmy, thanks a lot. The summary of it is 8.9% sales growth for the group. Of course, RSA supermarkets did much better at 9.5%. So top-line growth at a very, very low inflation – we must not forget that. Inflation came down to as low as 1.9%. One must be careful when you compare percentages, because a little more than a year ago, inflation was at 13%. Then, of course, you report maybe numbers in the twenties.

So, if you look at the number of 9% sales growth, you say, ‘Oh, are they slowing down or what?’ That’s not the case. We must always remember that.

Then if we go to the second line, which I’m very proud of, it’s the fact that gross profit has grown by 10.6%. We’ve increased our percentage by 40 bps [basis points], yet remain the cheapest supermarket in South Africa, giving the best value.

You mentioned the number of R16.5 billion to consumers in savings at till point. And then, we jump to the bottom line, 16.6% growth in trading profit in the macro environment where we are. I don’t have to explain that to you. I think it summarises an outstanding performance from Team Shoprite, of which I’m very proud.

JIMMY MOYAHA: Following our last conversation, Oom Pieter, we’ve spoken about the fact that Shoprite is ticking along as a global grocery retailer at this point – with the margins, with the numbers, with the metrics. By every standard, we are no longer comparing Shoprite to some of the local grocery companies you compete with, even though that is still primarily the landscape that you compete with. But at least when I look at the volumes of the amount of goods that the Shoprite business has been able to move in the past year, the numbers suggest that you are one of the best retailers in the world, not just in South Africa.

Now that’s a very telling statistic, especially if we think about the global landscape that we find ourselves in. How is Shoprite able to stay this competitive and this ahead of the game?

PIETER ENGELBRECHT: Right. Number one, we are absolutely customer-obsessed. I know all companies say, ‘customer focused, customer focused’, but we really live and breathe it.

I’ll give you one example. We’ve got the policy here that the sun doesn’t set on a customer complaint. What do we mean by that? Every single customer complaint that we get in a day is resolved on the same day. We don’t go to bed before it gets done. That’s why I can say we are really customer-obsessed.

With that comes the innovation that is needed for us to bring consumers value so that they can improve their lives.

This journey started a couple of years ago. We separated the brands very clearly [of] Shoprite and Checkers, and then we started to invest behind that.

From a technical or technological point of view, we have laid the foundation of the 51����system that gave us line-item profitability and gave us a real view of stock across the supply chain. And then, we started investing in things like price-optimisation tools, personalisation tools, Rainmaker Media, a lot of digital AI data scientists. They started to write algorithms for us, to understand things better and make precise data-[based] decisions, not gut feeling – ‘I feel like this’.

Maybe you’ll like this example. We had a situation where one of the regions was losing pie sales. So what does the normal retailer instinct do, or tell you to do? It’s to say, ‘What about two for the price of one?’ That’s until we looked at the data and the data said no, people don’t buy two pies. They usually buy a pie and a muffin. Oh, so you make a deal for a price – a pie and a muffin.

That’s a simplistic way of explaining how you are making data-driven decisions compared to what you think and what your gut feel is.

And those products and all those investments we’ve made are starting to mature now. We’re starting to see the return on investment from those. And we’ve been investing quite a bit in capital. For the last three years almost every year we’ve invested R8 billion in capital. Okay – a lot of that went into new stores as well, but a lot of that went into technology.

I’ll give you another last example – I’ll now be giving you two long-winded answers. But there are over 900 software upgrades on the Sixty60 platform in a year, meaning enhancements to make the experience better, faster, all those things. That alone tells you a story of what goes into the innovation part.

JIMMY MOYAHA: Oom Pieter, I want to take a look at the other side of the business around the expansion – opening a net 281 stores. We touched on the fact that one of those was the opening of the 500^th Usave store in South Africa. The business has been growing.

Alongside that, the business has been continuing to create jobs within that space, adding more than 8 700 jobs in this particular financial year.

I saw something interesting that came out of the team at Just Share around the average minimum wage that’s being paid by Top 40 companies. Now, Shoprite didn’t rank highest on that list, but Shoprite does employ more than 150 000 individuals across the business. How do you sustain all of these employees, and how do you take the approach to looking after them the same way you look after your customers?

PIETER ENGELBRECHT: Yes, I do think that’s a one-sided comparison. But it’s not. It’s the emotional argument and not one that you can win. So let’s stick to the facts – Shoprite employees.

On our payroll, we have 168 000 people. One must not forget that there are a lot of indirect jobs that are not accounted for here. I’m talking about trolley collectors, merchandisers at store level, security personnel.

If you add all of that, we’re talking a number of probably closer to 230 000-odd people that Shoprite almost directly employs.

We are extremely proud of the 8 700 direct jobs we’ve created. Now, what is the thing about minimum wage and then the CEO’s salary? Somewhere I have to start. The second question when you apply for a job that you get asked is ‘What’s the relevant experience?’ Now, where am I going to get the relevant experience if there’s no employment in the country? So we make a special effort to give people a chance. It’s a starting point only, and you don’t stay at that level where you start, the day you start right at the lowest level or at the minimum wage.

Employment efforts

In the past year, we specifically selected unemployed youth. We spent R130 million training them to give them some form of experience to equip them better to find employment.

Secondly, we have internally had over 18 000 internal promotions – in other words people who were promoted internally. So they obviously are now moving away and further away from the minimum wage, so to speak.

Then what everybody forgets is that very few, if any other, South African companies have an Employee Trust. Our Employee Trust already has paid over a billion rand to our employees.

The only requirement to qualify is you must have two years of employment history with us, of course. You must have been employed by us for two years or more.

Those are not salaries or bonuses and that. It’s easy to forget all of these and the fact that we’ve spent over R1 billion in this year on training of these 170 000 people, equipping them even better to improve or get a promotion – or even, for that matter, to go into business on their own.

I think any person who has been at Shoprite for five years or so can do anything. They would be so well equipped in terms of a general [understanding of] how business is conducted – from reading financial statements to customer service. We have to look at this holistically and then say what we really do.

JIMMY MOYAHA: Holistically, it’s certainly an important thing. And for context, that 168 000 people that Shoprite does employ makes them the largest private-sector employer in South Africa by number of people on their payroll.

Oom Pieter, let’s wrap things up with the other billion-rand conversation, the billion rand in buybacks that you’ve been able to conduct in this financial year alone, bringing the total share buybacks of this particular endeavour to just over R2.6 billion. That’s returning value to the other client of yours – and that’s of course the shareholder.

PIETER ENGELBRECHT: Definitely. And this year, I’d love to add to that. Obviously we look at our cash, the free cash flow that we generate; we generate roughly R23 billion in cash in a year. We spend R8 billion on capex. We pay tax. We pay dividends. And then we make sure we maintain roughly around $10 billion in free cash flow.

That was part of a plan. We still have a mandate to do more buybacks. But that always comes when we think that is a better option of return to the shareholder than any other investment.

Then, on top of that, don’t forget we have not skipped paying a dividend any year – through Covid-19 and all of those things. The dividend is up this year 9.7% – R8.71 is the final dividend for the full-year dividend. The return on equity on the share for the shareholders is currently at 26% – actually 27% – and the Roic [return on invested capital] this year moved from 16% to 19.6%

I think as a general myself, a shareholder, I am content with that performance.

JIMMY MOYAHA: Contentment from the largest retailer on the African continent after a stellar year of performance. The business continues to grow in every metric, including the online business that has reached just shy of R19 billion in sales through the Sixty60 business.

But we’re going to have to leave this conversation on that note. We are unfortunately out of time. Thank you so much to the chief executive officer of the Shoprite Group, Pieter Engelbrecht, for taking us through the performance of the business and some of the big milestones the business has been able to achieve.

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The Group maintained a trading margin of 5.6% with sales having increased by 12% to R240.7 billion, an annual increase of R25.8 billion. Its core business, Supermarkets RSA which houses its trading brands Shoprite, Usave, Checkers, Checkers Hyper and LiquorShop, achieved sales growth of 12.3% and contributing 81% to Group sales off the back of a 4.5% annual increase in customer visits.

“We saw impressive growth at both ends of our targeted market segments,” commented CEO, Pieter Engelbrecht. “Checkers remains the fastest-growing premium grocer in the country for a third consecutive year, with sales growth this year of 12.3%. Online sales from our industry-leading on-demand delivery platform, Checkers Sixty60, grew by 58.1%; it is continuing to disrupt South Africa’s retail market as it expands beyond groceries to include general merchandise delivered by our new fleet of Checkers Hyper delivery vans.”

The Shoprite and Usave brands increased sales by 10.7%, expanding the Group’s reach into underserved communities through its low-cost Usave discount stores and Usave eKasi container stores.

“Despite these sales growth rates, we fell just short of our own internal targets for 2024. This speaks to the culture of our business: we set a very high bar and believe that we can always improve and always do better. Despite operating under markedly different circumstances to many of our global counterparts, Shoprite has continued to demonstrate global competitiveness with consistent market share growth and sector-leading execution which allows us to fulfil our customer promise. We are the largest 51����retail customer by number of transactions in the world and one of the top retailers globally in terms of the volume of product moved. Our performance this year demonstrates our ability to deliver under challenging conditions,” he said.

Across the Group, net 292 stores opened during the period including 63 new format specialist stores in adjacent categories as well as 73 Ok Franchise stores, bringing its total footprint to 3 639 stores across the ten countries it operates in.

Checkers Sixty60 is now available in 539 stores, an increase of 73 stores year-on-year. The omnichannel retailer also saw impressive growth in its Xtra Savings rewards programme with more than 31 million members and 2 500 swipes per minute. The Group also launched Xtra Savings Plus during the year, SA’s first grocery subscription plan.

With its 82 rooftop solar systems installed across 77 of its sites (73 in SA and four in Namibia with a capacity of 36 172 kW), the Group obtained 6.5% of its electricity from renewable sources (FY2023: 5.5%), surpassing its target. It consumed 125 567 MWh of renewable energy (FY2023: 103 234 MWh) which reduced its emissions by 123 684 tCO2 e (FY 2023: 106 141 tCO2 e).

Its Board declared a final dividend of 445 cents per share, resulting in a full-year dividend of 712 cents per share and representing a 7.4% year-on-year growth in dividend per share.

This article first appeared here:

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The beta app will continue to offer same-day delivery scheduled within a 60-minute time slot but will boast a much wider range of products.

In addition to groceries, customers will be able to shop for camping and outdoor gear, small appliances, baby products, toys, kitchen and home electronics, gardening supplies, and pool equipment.

The new Sixty60 app is already available to customers who live in certain parts of Cape Town, with Checkers planning a phased national rollout after beta testing.

Shoprite said that this strategy would help ensure a seamless user experience. During the beta testing period, deliveries on the new app will be free.

The supported areas in Cape Town include the following:

• Bellville
• Blouberg
• Brackenfell
• Camps Bay
• Century City
• Durbanville
• Edgemead
• Gardens
• Goodwood
• Kuils River
• Milnerton
• Observatory
• Parklands
• Rondebosch
• Table View
• Sea Point

Shoprite strategy and innovation chief said the company was confident the next iteration of Sixty60 will again disrupt online retail in South Africa.

“Our precision delivery promise means no more waiting at home all day for your general merchandise order to arrive,” Schreuder said.

“Customers can now choose the 60-minute time slot in which they’d like their Hyper delivery to arrive, with the same to-the-minute driver tracking they’ve become accustomed to on their grocery orders.”

The rollout comes after Shoprite CEO briefly spoke about the platform’s  during an earnings call on the company’s interim results for the 26 weeks ended 31 December 2023.

“In terms of further development. Yes, we consistently will continue to develop Sixty60,” he said. “We are currently busy rewriting the platform.”

Engelbrecht said ’s approach to logistics management set it apart from competitors — including Amazon and Takealot.

He added that it is one of the primary reasons the online delivery service was “very profitable”.

“We have this very large footprint of stores that we use as micro fulfilment centres as opposed to a very expensive single dark distribution centre,” said Engelbrecht. “I know there are people who don’t believe it, but believe me — it is very profitable.”

The software behind Checkers Sixty60 — — also significantly contributes to the service’s success.

Shoprite previously told MyBroadband that SAP’s Retail platform provides stock ledger and real-time sales data, which is critical for accurately fulfilling customer orders.

“The ERP also provides promotional information, prices and article data to Sixty60, which ensures that the prices on Sixty60 are the same as the prices in-store,” Shoprite said.

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