Shoprite acquires Vida e Caffè and R&A Cellular

Shoprite is accelerating its expansion beyond traditional grocery retail through two strategic acquisitions that will strengthen its presence in financial services and the coffee and quick-service restaurant market.

The group has acquired the payments and technology company R&A Cellular and signed an agreement to acquire the coffee chain Vida e Caffè, subject to regulatory approval.

CEO Pieter Engelbrecht said Shoprite had increasingly moved away from a “do-it-all” approach over the past decade.

“In parallel, over the past decade we have moved selectively from a do-it-all philosophy to partnering or acquiring where specialist expertise, capacity or speed-to-market offered a clear advantage,” he said.

The R&A Cellular transaction, which became effective in August, gives Shoprite an initial majority stake in a technology and payments business serving informal and semi-formal retailers.

Shoprite plans to expand R&A Cellular’s installed payment device base, broaden its value-added services offering and deepen its reach into South Africa’s informal economy, a market where demand for convenient, low-cost financial services continues to grow.

The second acquisition will take Shoprite into the coffee and quick-service restaurant sector. Vida e Caffè operates about 400 corporate and franchise shops.

Shoprite said the business will strengthen its exposure to a fast-growing consumer category while adding 25 years of operating expertise and a growing digital offering.

The acquisitions come against the backdrop of strong financial and operational performance. Group merchandise sales increased 7.2% to R270.8bn in the 52 weeks to end June, while revenue rose 7.1% to R274.8bn. Trading profit increased 8.4%.

The core Supermarkets RSA division, which accounts for more than 84% of group sales, grew revenue 7.1% to R228.7bn, ending the year with 2,839 shops.

Shoprite’s Sixty60 on-demand delivery platform continued its rapid expansion, with sales rising 34.5% to R25.5bn and adding a record R6.6bn in revenue during the year.

The retailer’s strategy of expanding into adjacent categories also delivered results. Petshop Science increased sales by 74.5% after opening 41 new shops, taking its footprint to 185 outlets.

Shoprite opened a net 232 shops during the year, created 5,491 jobs and increased its full-year dividend by 11.8% to 873c a share.