SummarySummary Companies Diesel costs to remain elevated due to rolling power cutsHigher costs are pressuring marginsShoprite sales jump 16.8% in six months to Jan. 1Retail group plans 238 new storesJOHANNESBURG, March 7 (Reuters) - South Africa's biggest supermarket group Shoprite (SHPJ.J) expects diesel costs to operate generators to remain elevated given rolling power cuts, pressuring its margins, but says new store openings will drive growth in 2023. Like its peers, Shoprite is grappling with severe rolling power cuts, forcing it to crank up diesel generators and spend more on back-up power supplies, adding to soaring costs for raw materials, transport and packaging. In the six-months to Jan. 1 the retailer said it spent 560 million rand ($31 million) on diesel to operate generators, a 465 million rand increase from 2021. Due to extra spending on diesel "We are not reporting the level of profit and dividend growth normally associated with such a notable achievement in terms of sales growth," Chief Executive Pieter Engelbrecht said. To help minimize costs, Shoprite has plans to contain food wastage as a result of power cuts and the level of maintenance needed to run assets like fridges, Engelbrecht told investors.

Source: The North Africa Journal March 07, 2023 23:43 UTC