Executive Summary

In this report, we will look at the half-year 2025 results:

Supermarkets RSA

• Supermarkets RSA delivered sales growth of 10.4% to R107.7 billion, driven by a 6.1% increase in like-for-like sales.
• Internal selling price inflation for the segment eased to 1.9% during the period, down from 7.7% in the first half of (H1) 2024.
• Checkers and Checkers Hyper, including Checkers Liquor Shop, increased sales by R5.7 billion (13.6%) to R47.6 billion, up from R41.9 billion in H1 2024.
• Checkers Sixty60, the Group’s on-demand grocery delivery app increased sales by 47.1% (H1 2024: 63.1%)
• Shoprite and Usave, along with Shoprite Liquor Shop, recorded a 7.1% increase in sales, rising by R3.9 billion to reach R59.2 billion (H1 2024: R55.3 billion)

Supermarkets non-RSA & Other operating segments

• Supermarkets non-RSA delivered 4.1% sales growth to R11.0 billion in H1 2025, contributing 8.6% to group sales.
• Internal Food Inflation: Averaged 9.5% across the non-RSA regions during the period.
• Other Segments: Revenue from other operating segments rose 6.2% for the period, contributing 7.7% to group sales.
• We have upgraded Shoprite from Hold to Buy, raising our intrinsic value by 14% to R318. The revision reflects strong earnings momentum, resilient margins, and solid performance across key segments.

Analyst thesis

At current levels, the stock trades below historical price multiples and presents an upside to our intrinsic value.

Shoprite is a high-quality SA retailer as evidenced by:

• Internal price inflation for the period averaged just 1.9%. This reflects Shoprite’s commitment to affordability and its ability to pass on cost savings to consumers, which should help with future volume growth.
• Shoprite’s consistent margin expansion, driven by pricing power and operational efficiency, underscores its ability to preserve profitability while maintaining affordability, solidifying its value-driven market leadership.
• Successful platforms like Sixty60 and Xtra Savings have boosted transaction values and customer loyalty, reinforcing margin resilience and evidencing management’s innovation.
• The group’s consistent rollout of new stores across various formats, without compromising operational efficiency or margin integrity, reinforces its ability to capture market share, drive top-line growth, and deliver long-term shareholder value.
• South Africa’s recent shift to lower interest rates and a subdued inflation environment creates a supportive backdrop for consumer-focused businesses like Shoprite.