Shoprite Reports Profit Growth Amid Low Food Price Inflation

South Africa’s largest grocery retailer, Shoprite Holdings, posted a 7.7% rise in half-year profit, driven by strong festive season demand, even as low internal selling price inflation continued to weigh on margins.

Headline earnings per share from continuing operations increased to 710.5 cents for the six months ending December 28, 2025, up from 659.8 cents a year earlier. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 6.7% to 12.4 billion rand ($767 million).

Gross margins fell slightly by 10 basis points to 23.8%, reflecting decelerating food price inflation and rising operating costs. The company expects full-year gross profit margins to range between 23.9% and 24.2%.

Shoprite highlighted that a record 14,400 items were cheaper in December 2025 compared with December 2024. Internal selling price inflation at its South African supermarkets slowed to 0.7%, far below the official 4.7% food inflation rate.

Group sales grew 7.2% to 136.8 billion rand, with supermarket sales up 7.1% due to more customer visits (up 5.6%) and increased product sales. For January, the first month of the second-half period, sales in South African supermarkets rose 7.5%.

The retailer signaled that low single-digit selling price inflation is likely to continue through the remainder of the second half of the 2026 financial year. Interim dividends were declared at 307 cents, reflecting a 7.7% increase.

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CEO Pieter Engelbrecht noted that Shoprite passed over 1 billion rand worth of discounts to support cash-strapped consumers, balancing profitability with affordability amid challenging market conditions.