Is Checkers Sixty60, Shoprite’s digital on-demand grocery delivery service, beginning to lose momentum?
Today, the Shoprite Group announced that Checkers Sixty60 saw a 58.1% increase in sales for the 2024 financial year. However, this growth is notably lower compared to the 81.5% rise reported in 2023. The company did not provide an explanation for the slowdown in sales growth for Checkers Sixty60 during this reporting period.
In addition, Shoprite revealed that advertising expenses increased by 10.5% to R4.1 billion, driven by heightened activity from its Rainmaker Media and Sixty60 on-demand business units.
The JSE-listed retailer also disclosed a 13.1% rise in inventories, reaching R28.4 billion in 2024, up from R25.1 billion in 2023. This results in an inventory-to-sales ratio of 11.8% based on sales over the past 12 months.
The company attributed the inventory increase to several factors, including:
- Supporting the growth of existing businesses and new stores opened over the past 12 months.
- Maintaining in-store inventory levels to meet the growing demand from the Checkers Sixty60 business, which relies on in-store inventory for order fulfillment.
- Keeping safety stock levels in distribution centers (DCs) from both local and import suppliers to mitigate the impact of external service disruptions.
- Holding additional inventory related to the expansion of the supply chain network servicing the KwaZulu-Natal region (Canelands DC R438 million) and Gauteng region (Riverfields DC R459 million).
Shoprite also reported a 12% increase in revenue, reaching R246.1 billion, with group merchandise sales rising by 12% to R240.7 billion for the 2024 financial year.
The group’s diluted headline earnings per share (HEPS) grew by 7.4% to 1 245.2 cents, while adjusted diluted HEPS increased by 10.3% to 1 273.2 cents.
“Our core customer base remains front and center in our business, keeping us on point to deliver the lowest prices and maintain our in-stock positions. As a result of our brand segmentation strategy, Shoprite and Usave meet the needs of their customers in different ways, however their shared operational structure facilitates best-in-class execution to meet the high-volume demands required at differing peak times for each,” said Pieter Engelbrecht, CEO of Shoprite.
