Editing Shoprite Holdings Limited (section)

== Risks ==
Shoprite faces a variety of risks that could potentially impact its financial performance and operations on a day-to-day basis. Shoprite conducts its primary operations in South Africa and thus faces the challenges of loadshedding. Loadshedding is an energy crisis currently faced by South Africa whereby the country experiences nationwide rolling blackouts on a daily basis. The threat of no electricity inhibits some of Shoprite's operations. For instance, this renders some key IT systems unavailable. To manage this risk, Shoprite has implemented data recovery methods as well as  increasing its investment in alternate energy sources such as solar power, generators and inverters. Another core risk faced by Shoprite are the breakdowns or interruptions in the supply chain. Supply chain interruptions, such as the Russian invasion of Ukraine or loadshedding, mean that Shoprite is unable to fully satisfy their customers’ demands. Shoprite manages this risk by implementing business continuity plans, such as opening certain locations along the supply chain, so as to ensure an uninterrupted supply of goods.

Lastly, Shoprite belongs to the food retail industry, which is largely a defensive industry. This means that the risks associated with changes in the macroeconomic environment (such as changes inflation and unemployment) are to some extent mitigated due to the nature of the industry. For example, during challenging economic times, individuals may have less disposable income for luxury goods but will still need to purchase necessary items from the food retail industry. This is illustrated by Shoprite’s ability to maintain its gross margins during the recent challenging economic conditions. Therefore, although there are several risks that pose a threat to the food retail industry, Shoprite displays and ability to manage these risks and remains a buy recommendation.