Shoprite admitted on Tuesday that price rivalry among food retailers in South Africa and Africa where it has operations would be tough in the next half of the financial year.

JSE-listed food retailer said this will be attributable to a surge in the struggle for market share among South Africa’s and the continent’s food retailers.

“…the group will be investing substantially in ensuring its price leadership position and absorbing the inflationary impact on the consumer, which may put margins under pressure,” Shoprite said, without disclosing the amount of money it planned to invest.

“The board believes the group will nevertheless be able to achieve encouraging turnover and profit growth in the new financial year.”

The company posted a 12 percent surge to R92.7 billion ($9. 1 billion0) in merchandise sale in the year to March this year.

The group said gross income leapt 14.4 percent to R19.4 billion ($1.9 billion), while operating income surged 17.4 percent to R5.4 billion.

Headline earnings a share soared to 675.4 cents a share from 607 cents a share in the previous reporting period.

Headline earnings are used to measure the profitability or non-profitability of companies in South Africa.

The company announced an annual dividend of 215 cents a share. This money will be paid to investors on Monday, 16 next month.
The company said consumers will feel the multiplier effects of the feeble South African currency in the new financial year.

Shoprite operates over 1200 corporate and 270 franchise network in 16 countries throughout Africa and the Indian Ocean Islands.

It launched its first business in South Africa’s small town in 1979 with the acquisitions of eight supermarkets in Cape Town for R1 million ($98, 582).

The following three decades were marked by many purchases and spreading out plans that brought the company to the R72 billion ($7 billion) business that Shoprite has now become.