Africa's largest retailer, Shoprite Group has signed an agreement to dispose of its furniture business, including OK Furniture and House & Home brands, to Pepkor Holdings.
Additionally, the group said on Tuesday (3 September), that it is in advanced discussions to purchase the remaining 50% shareholding in its last-mile logistics provider, Pingo Delivery.
"In terms of the way forward, we have embarked on two structural changes to the business, both occurring subsequent to our June year-end close," said Pieter Engelbrecht, chief executive officer as the group announced its results for the 52 weeks ended 30 June 2024.
"Firstly, we have signed an agreement to dispose of the furniture business including the OK Furniture and House & Home brands, excluding Angola and Mozambique operations to Pepkor Holdings.
"Secondly, with regards to our vision to be Africa’s most profitable omnichannel retailer, the group is in advanced discussions to purchase the remaining 50% shareholding in our last-mile logistics provider, Pingo Delivery, and will update in due course."
With respect to its furniture business, Engelbrecht said that the business found itself at a crossroad with the business’s future growth and profitability hamstrung by the requirement of a level of investment that would have resulted in re-directing capital and project management resources away from its food retail operations.
"We believe the best outcome for OK Furniture and House & Home is for the business to operate in an environment where its required infrastructure and credit management expertise exists, thus allowing us to focus our resources on what we do best," he said.
Checkers Sixty60 orders are serviced from stores closest to customers, while the delivery service has been outsourced to Pingo, the Group's 50/50 joint venture with RTT On-Demand.
"Pingo delivery provides us with a critical building block in terms of executing our strategy to own intellectual property in Iast-mile logistics while providing us with a platform to monetise our expertise in this area," the group has said in the past.
Checkers Sixty60, the group’s digital on-demand grocery delivery service increased sales by 58.1% (2023: 81.5%), expanding the store base from which it services Checkers customers to 539 stores (2023: 466 stores).
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