• South Africa’s biggest retailer by all and Africa’s largest supermarket retailer saw sales from continuing operations rising 7.2% to R136.8 billion driven by tight price discipline, strong Checkers premium growth Sixty60 digital surge
• The Non-RSA segment grew even faster at 12.1% in rand terms to R11.6 billion, with robust gains in Angola and Zambia, while management guided for HEPS growth of 5.2–10.2% from continuing operations
• This performance stands in sharp contrast to Zimbabwe’s formal retail sector distress: OK Zimbabwe reported an 84% revenue collapse to US$28.26 million while Meikles posted heavy losses amid forex losses and margin contraction

Harare- Shoprite Holdings, South Africa’s biggest retailer by market capitalisation, sales, profit, number of employees and customer base and Africa’s largest supermarket retailer, has delivered a solid performance in 1HY26 ended 28 December 2025 according to its latest financial results.

The group increased sales of merchandise from continuing operations by 7.2% to R136.8 billion, adding R9.2 billion year-on-year compared to the restated R127.6 billion in the prior period.

As Africa's largest supermarket retailer and South Africa's biggest retailer, Shoprite continues to demonstrate exceptional scale and operational discipline in a challenging consumer environment characterised by subdued spending, high unemployment, elevated household debt levels, and high interest rates.

 The core Supermarkets RSA segment, contributing 84.3% of group sales at R115.3 billion, grew 7.1% (adding R7.7 billion). Like-for-like sales rose 1.9% despite deflationary pressures during the festive trading period.

Internal selling price inflation was tightly managed at an average of just 0.7%, far below Stats SA’s official food and non-alcoholic beverages inflation of 4.7%. Value banners Shoprite and Usave (including LiquorShop) achieved 5.1% sales growth with price deflation in core formats, while premium Checkers and Checkers Hyper (including LiquorShop) delivered 8.9% growth on modest inflation.

Digital commerce via the Sixty60 on-demand platform surged 34.6%. Adjacent and new-format businesses, including Petshop Science, Uniq Clothing by Checkers, Checkers Outdoor, and Little Me recorded exceptional growth exceeding 70%.

The group expanded its RSA network aggressively, adding a net 262 stores to reach 2,747 outlets, with significant contributions from 81 new LiquorShop stores and emerging-format additions. 

Supermarkets Non-RSA posted stronger growth, with sales reaching R11.6 billion, up 12.1% in reported rand terms (8.4% of group sales) and 9.5% in constant currency. The segment added a net 15 stores (7 Shoprite and 8 LiquorShop) to total 272 outlets across seven southern African countries.

Constant-currency performance was robust in Angola (+9.3%) and Zambia (+9.9%), with only Mozambique showing a contraction (-8.0%). Other operating segments (OK Franchise, Transpharm/Medirite pharmacies, Red Star Wholesale, and Computicket) grew 3.5% and represented 7.3% of total sales. 

Management provided voluntary earnings guidance, indicating headline earnings per share (HEPS) and diluted HEPS from continuing operations are expected to grow between 5.2%–10.2% and 5.4%–10.3% respectively, reflecting sustained profitability, margin discipline, and confidence in the group's ability to navigate the macro headwinds.

In sharp contrast, Zimbabwe’s two largest formal retailers OK Zimbabwe and Meikles endured severe distress during their comparable half-year periods.

OK Zimbabwe suffered a dramatic collapse, with revenue falling 84.07% to US$28.26 million from US$177.43 million in the prior period. Sales volumes declined 82.68% to 24.23 million units, driven by acute liquidity shortages, supplier credit constraints, persistent empty shelves, and strategic closures of non-viable stores, including all Food Lover’s Market franchise outlets.

The group swung from a net profit of US$3.71 million to a net loss of US$17.81 million. Operating costs remained disproportionately high relative to reduced sales, with employee benefits at US$9.51 million, other expenses at US$11.76 million, utilities and backup power costs at US$5.30 million amid prolonged outages, and finance costs rising to US$2.10 million.

Although a US$20 million rights issue was successfully completed, delays in property disposals (targeting US$10.5 million) left the group short of the minimum US$30.5 million in liquidity required to rebuild inventories and restore normal trading. 

Meikles (operating TM Supermarkets as TM Pick n Pay) showed slightly better nominal resilience but still recorded substantial losses. Inflation-adjusted supermarket revenue increased 11% to ZWG 5.9 billion (down 6% in USD terms), with units sold down only 1%.

However, gross margins contracted to 28% from 31%, operating costs rose, and the segment posted a post-tax loss of ZWG 143 million (versus a prior profit of ZWG 27  million). The group reported an after-tax loss of ZWG 165.7 million (compared to ZWG 1.5 million prior), exacerbated by a ZWG 65.1 million exchange loss on USD-denominated trade payables.

The divergence highlights why Shoprite is thriving while Zimbabwean formal retailers are failing. Shoprite benefits from massive procurement scale (enabling better supplier terms and cost efficiencies), a vast national and regional footprint (thousands of stores across stable markets), diversified formats catering to all income levels (value to premium), aggressive private-label development (boosting margins and loyalty), and strong digital innovation (notably the Sixty60 platform for on-demand delivery and omnichannel integration).

These strengths are made possible through Shoprite's substantial capital access, consistent cash flows, strategic investments in technology and supply chain infrastructure, and a supportive South African regulatory environment that facilitates credit, infrastructure reliability, and proactive measures against unfair informal competition.

Shoprite is also capitalising on digitalisation, with rapid growth in e-commerce and delivery services that enhance convenience and capture younger, urban consumers, something Zimbabwean companies are still far behind in adopting, largely due to expensive data costs, limited internet penetration, unreliable power for tech infrastructure, and constrained capital for digital investments. 

Despite positive steps like the repeal of Statutory Instrument 81A of 2024 (via SI 34 of 2025 in April 2025), which removed penalties for pricing above the official exchange rate and restored pricing flexibility to help formal retailers compete with informal traders, the Zimbabwean government remains largely reactionary. Such protective policies are often implemented only after significant retail distress, widespread store closures, or sector crises become acute rather than proactively building a stable ecosystem for formal business growth.

Zimbabwe suffers more acutely from smuggled goods, broadly from South Africa and other neighbours, along with illicit and counterfeit products that undercut formal pricing, evade duties, and erode market share.

While spaza shops and informal trade pose challenges in South Africa too, Zimbabwe's situation is amplified by persistent currency fluctuations , extremely high borrowing rates that deter expansion and increase finance costs (impacting companies like OK Zimbabwe, Beta Bricks, Willdale, Cafca, and even AFDIS in beverages), and low confidence in policing and enforcement against smuggling networks.

These factors create an uneven playing field, where formal operators face prohibitive costs and risks, while informal and illicit channels thrive on lower overheads and evasion.

For the formal retail sector to survive and eventually recover in Zimbabwe, there is a clear need for decisive government intervention. A dedicated retailers' fund or targeted capitalisation programme for the retail sector would provide much-needed liquidity to rebuild inventories, restore supplier confidence, and enable modest expansion.

Such support would directly benefit the government itself through sustained employment (formal retail remains a major formal-sector employer), higher tax collections (VAT, corporate tax, PAYE), and continued corporate social responsibility contributions to communities, outcomes that informal traders contribute far less to in a meaningful, measurable way.

Because many of the current distortions, currency mismanagement, delayed protective policies, weak border enforcement, and high borrowing costs stem from or have been exacerbated by government actions or inactions, the state has a responsibility to intervene under normal circumstances, not only in crisis mode.

Proactive fiscal and monetary support, combined with accelerated anti-smuggling enforcement and infrastructure improvements (power, logistics), could help level the playing field and prevent further formal-sector erosion. Without it, the collapse of listed retailers risks becoming irreversible, with long-term damage to employment, supply chains, and government revenue.

Equity Axis News