As at 3 February 2026

Executive Summary

Key highlights

In this report, we review SHP’s 1H26 trading update and evaluate its implications on our view.

Financial results at a glance (the comparable numbers are YoY unless otherwise stated):

• Group sales were up 7.2% for the period, driven by growth across all segments.
• Group sales remained strong but slowed sequentially in the second quarter to 6.5% (1Q26: +8.0%).
• Supermarket RSA’s revenue (84.3% of group sales) was up 7.1% for the period (1Q26: +7.9%, 2Q26: +6.5%) and showed slower growth in the second quarter.
  • LFL sales were up 1.9%. 
  • Shoprite and its associated brands grew 5.1% with Checkers and its associated brands up 8.9%; while Sixty60 surged 34.6%. 
  • Selling inflation averaged 0.7%, remaining below official food and non-alcoholic beverages inflation of 4.7% over the period.
• Supermarkets non-RSA’s revenue (8.4% of group sales) increased 12.1% for the period (1Q26:+12.9%, 2Q26: +11.3%), also showcasing a slower second quarter albeit maintaining resilient performance.
• Other operating segments’ revenue (7.3% of group sales) was up 3.5% (1Q26: +4.8%, 2Q26: +2.3%).
• SHP opened 262 new stores within Supermarkets RSA and 15 Supermarkets non-RSA stores over the last 12 months. 
• HEPS is expected to grow between 5.2% and 10.2% with diluted HEPS expected to grow between 5.4% and 10.3%.
• Interim results are expected by 3 March 2026.

Key result takeaways:

• The business continues to grow, but the pace of its main Supermarkets RSA segment is beginning to slow, despite still outpacing peers (2.3x ahead of the rest of the market in the last six months). 
• The business continues to expand and capture market share, but slowing growth may signal a strategic shift towards maintaining, rather than rapidly growing its position. 
• SHP remains a quality business and has a strong record of executing effectively on its strategies.
  

Analyst thesis

Our recommendation is based on:

• Valuations are subdued from an EV/EBITDA and P:E perspective.
• SHP’s low value proposition, in keeping pricing inflation lower than general food and non-alcoholic inflation, positions it to continue with its momentum to gain market share.
• Checkers Sixty60 continues to dominate the grocery delivery space albeit growing competition (Woolies Dash, Pick n Pay ASAP!, Zulzi, etc).
• It’s a stable growing business with a hold across LSM bands from its Shoprite & Usave formats to Checkers and Checkers Hyper stores.
• SHP is well-positioned to benefit further as consumers experience easing pressure from stabilising inflation and SARB interest rate cuts.