Shoprite group records profit of N$5,2b

THE Shoprite Group has managed to make a profit of N$5,2 billion for the year ended 1 July 2018, a 4,1% drop compared to the N$5,4 billion seen in 2017.

The group continues to make profits, despite the local Shoprite operations still paying their workers low wages.

These wages, which led to Shoprite workers in Namibia hosting an illegal strike in 2015, ended in the retailer suing them for N$4,5 million.

The company claimed the N$4,5 million was for profit losses, legal costs of court action and disciplinary hearings, as well as the costs incurred to employ temporary labour while the workers were on strike from 28 to 29 July 2015.

However, following a public outcry and calls to boycott Shoprite, the company dropped the disciplinary charges, and withdrew its N$4,5 million damages lawsuit.

Most Shoprite workers in Namibia earn between N$1 000 and N$3 000 on average.

Nonetheless, Shoprite Group’s chief executive, Pieter Engelbrecht,said the company continues to invest in its people and products. He also said the group secures growth opportunities in South Africa and beyond.

Speaking on the results that were released last week, Engelbrecht added: “The investments are for the long-term growth of the business, and to serve our customers, communities, suppliers and shareholders. Our ability to extract growth in trying circumstances validates the strength of our strategy, which not only includes geographical diversification, but also the extraction of value across all operations and brands.”

He added that in testing trading conditions, the group managed to increase total turnover by 3,1% to R145,3 billion during the period under review, while “positive volume growth of 2,7%, combined with a 3,3% increase in customer numbers, as well as local market share gains continue to reflect a strong underlying performance.”

The group’s trading profit was 1,4% lower at N$8 billion in July 2018, compared to the N$8,1 billion in 2017. This, however, showed a healthy trading margin of 5,5%.

Engelbrecht noted that the group continues to advance its primary purpose to be Africa’s most accessible and affordable food retailer.

Regarding the affordability of Shoprite prices, the labour ministry’s permanent secretary, Bro-Matthew Shinguadja, had emphasised that Shoprite workers subsidise the low prices which the retail shop charges.

Speaking at a media briefing earlier this month, Shinguadja said: “Shoprite charges low prices, benefiting consumers, at the expense of the low salaries the retailer pays its employees. This is why Shoprite does not want to increase the salaries of its workers. The country, however, does not have a minimum wage yet, and research is being done in order for the government to do a good job.”

Workers who had spoken to The Namibian on condition of anonymity stressed that although some of them had worked at the company for more than seven years, their salary would roughly be N$3 000.

Others said for six years, they were only earning N$1 000 a month as casual workers, and only this year did they manage to receive a salary increment of a little over N$3 000 a month after becoming permanent employees.

One worker earning N$2 800 a month said the money is not enough for the month. “For instance, from my salary after deductions such as pension, social security and staff-related costs, I end up with close to N$2 400, which is mainly for my expenses such as rent, transport, my children and so forth”, the worker explained.

Unfortunately, many Namibians are earning these slave wages, with statistics in the 2017 Namibia Financial Inclusion Survey by the Namibia Statistics Agency showing that the percentage of Namibians who earn between N$1 001 and N$2 000 was 29,1%, the second-highest figure after the percentage of Namibians who earn less than N$1 000 a month, which stands at roughly 33%.

Meanwhile, 10% of adult Namibians earn between N$2 000 and N$3 000, compared to the 9,7% of Namibians who earn over N$11 000.

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