Shoprite Sells Off: Can the Share Regroup?

Shoprite Holdings Limited (JSE: SHP) has encountered a challenging start to the year, with its share price closing the previous week over 2.2% lower, marking a fifth consecutive week of losses. Despite this recent decline, the stock has seen a year-to-date depreciation of over 12%, contrasting with a positive growth of over 7% over the past 52 weeks. 

Fundamentally, Shoprite has showcased a resilient performance, particularly in its core South African supermarket segment. The company reported a robust 14.6% sales increase during the 26 weeks ended 31 December 2023, translating to an additional R12.4 billion in customer spend. This growth can be attributed to strategic expansions, including the acquisition of 51 stores from Massmart Holdings Ltd and the successful launch of 197 new stores. Moreover, Shoprite’s innovative approach to customer engagement, notably through the Checkers Sixty60 app, has driven a 63.1% sales increase, reflecting its adaptability in a challenging operational environment. 

On the strategic front, Shoprite has joined forces with global retail giants to establish W23 Global, a venture capital fund aimed at accelerating innovation within the grocery sector. With an investment target of approximately $125 million (R2.3 billion) over the next five years, W23 Global seeks to address industry challenges through technology-driven solutions and sustainable practices. 

Technical Analysis 

The daily chart shows that Shoprite’s share price is currently trading flat, attempting to counter three consecutive sessions of declines. The price action trades below the downward-sloping 50-SMA (blue line), 100-SMA (orange line), and 200-SMA (red line), indicating a bearish trend. The recent cross of the 50-SMA below the 100-SMA further reinforces the bearish sentiment. 

The downward-sloping RSI (31.77) sits well below the 50.00 level, with the indicator likely to enter oversold territory in the coming sessions. While this could signal a potential short-term bounce, a sustained push lower could see the initial support level of 23,030 cents breached. A break below this level could expose the major support zone at 21,821 cents. 

Conversely, a recovery attempt would face resistance at the 25,434 cents level. Overcoming this hurdle with significant volume could indicate a shift in momentum and potentially lead to a test of the 26,663 cents and 27,829 cents resistance levels in the coming sessions. 


While the company’s fundamentals boast strong sales growth and strategic expansion, the recent share price decline and weak technical indicators suggest ongoing investor concerns. If the price breaks below the initial support level of 23,030 cents, a further decline towards the major support level of 21,821 cents becomes likely. However, a break above the resistance level of 25,434 cents could signal a potential reversal and open the door for a move towards 26,663 cents and 27,829 cents in the short term. 

Sources: TradingView,, Reuters. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

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