“We’ve been to war,” was how Pieter Engelbrecht, the CEO of Africa’s largest food retailer, described trading conditions behind the first drop in earnings since 1998, the year after Shoprite acquired OK Bazaars for R1 from SA Breweries. Armed robberies, record fuel prices, chronic unemployment, industrial action and the first VAT hike in 25 years all helped aggravate the hefty adverse effect of low inflation and the collapse of the Angolan currency on the group’s profits in the 12 months to end-June. The knock from Angola followed two years of 60% growth in earnings from that country, which had become the group’s star performer outside SA. The Shoprite share price slumped as much as 8.11% to R194.63 in intraday trading on Tuesday, its lowest level since July 12 2017, as shocked investors responded to the unexpected drop in earnings. Low food inflation in SA, which restricted the group’s ability to pass on nonfood cost increases, and a 50% drop in the Angolan currency were the major ...

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