Isle of Man-based Shoprite has responded to deflationary pressure on prices by investing in new IT, improving efficiency and restructuring the product range to achieve low single digit like-for-like grocery sales growth.
Unveiling its full-year results, Shoprite chairman Deryck Nicholson said the trading climate had become tougher in 2004 with strong competition from Tesco and Safeway.
“We have maintained turnover levels in the first three months of 2004, but operating profitability has been impacted by pricing pressures. Our competitors have focused heavily on EDLP. ”
In the last six months there had been a narrowing in the price differentials between the Isle of Man and the UK mainland, which did not allow for the higher costs of transporting goods to the island.
However, new EPoS and enhanced IT installed over the last six months had improved operational efficiency and cut costs, he said.
Growth at Shoprite’s eight foodstores and wine warehouse was being driven by the ClubMann loyalty programme and better ranging, which now included an extended Waitrose own label fresh food offer and an enhanced frozen own label proposition from Iceland.
A new £1.5m 12,500 sq ft store in Village Walk, Onchan, would open in September.
Group operating profits were up from £209,000 to £496,000 on sales up 2.4% to £55m for the year to January 3.
Sean McAllister