Shoprite's turnover grew 22.3 percent and trading profit was 43.7 percent higher for the year ending June, the company said on Tuesday.

The group's investments over the years were now reaping rewards and had led to its strong turnover growth, CEO Whitey Basson said in a statement.

The company had invested heavily in correctly positioning the groups' three supermarket brands, in operations outside South Africa and in extending and upgrading infrastructure.

Basson believed that during tight economic times, Shoprite managed to draw customers in due to its reputation for offering lowest prices.

Customer transactions at Shoprite increased by 11.2 percent in South Africa and resulted in a market share gain of just over one percent.

Checker repositioned

The Checkers chain, repositioned to cater for higher-income consumers, had also shown real growth, with turnover increasing by 15.6 percent in South Africa.

Shoprite ended the year with a profit of R1.586-billion, 46.1 percent higher than the previous year's profit of R1.086-billion.

Turnover grew from R38.950-billion to R47.65-billion in the last financial year.

Trading profit was 43.7 percent higher at R2.297-billion.

The company said it should be noted that this profit included a "sacrifice" of R286-million in gross profit it lost due to a decision by management last year to cut basic foodstuff margins.

Diluted headline earning per share rose 54.1 percent to 298.6 cents.

A final dividend of 106 cents per share had been declared.

The total distribution for the year would therefore be 155 cents per share, 53.5 percent higher than in 2007.

Shoprite said its growth was achieved mainly by its core supermarket division. Food inflation averaged 13.8 percent during the period. The company's own internal food inflation was 10.6 percent.

Basson said the group also operated 100 supermarkets outside of South Africa and these investments were paying off.

Logistically difficult

However he said trading in Africa was still logistically difficult and the group had had to invest heavily in supply chains, information technology capabilities and international sourcing skills.

The group had been able to buy aggressively and stockpile merchandise when there were food shortages in the world markets because it had invested in a network of distribution centres and transport fleets.

Basson said the group's furniture division grew turnover by 5.6 percent but trading profit went down by 24.2 percent. Current trading conditions were not expected to change materially in the new financial year.

The growth rate of the past year was not sustainable, Basson added.

"While food inflation continued to rise throughout the review period we expect it to reach its peak towards the end of the year."

Global food shortages would however remain a reality as competition for available stocks increased.

Yet, the group was strong enough to continue to perform well, said Basson.

Sapa