SHOPRITE SELLS PROPERETY TO INVEST IN TECH AND ONLINE STORE.

, Magazine

Shoprite Holdings Limited’s decision to sell some properties and lease them back is to free up cash to invest in technology, growing online sales and upgrading supermarkets to offer more fresh food.

 According to the chief executive officer, “These are the kinds of investments that give us very good returns. Pieter Engelbrecht, said in an interview after Africa’s biggest grocer reported first-half earnings growth on Tuesday.

Global retailers are increasingly leasing rather than owning real estate because “the heavier your property portfolio gets in your total asset base, the lower your return on invested capital becomes,” the CEO said. “So eventually we become more of a property company than a retail company.”

According to Bloomberg News, Shoprite launched online purchase with one-hour delivery last year and is converting about 80 Checkers stores to its produce-focused FreshX format. With almost 30 outlets already upgraded, the remainder will be completed over the next two years.

“We can’t ignore where the world is going and customer data is critically important for the future of retailers,” Engelbrecht said. “We now know much more about our products, our margins and our customers.”