Africa's largest supermarket chain Shoprite Holdings saw its gross margin slip to 23.8% as it cut prices to win customers from competitors. The Cape Town-based retailer reported first-half trading profit rose 7.1% to 7.2 billion rand ($446 million) in its South African supermarkets division, but selling price inflation averaged just 0.7% compared to 4.7% food inflation.

Shoprite's aggressive expansion included opening 209 stores locally and 53 in new formats like Petshop Science and Uniq Clothing. The price-cutting strategy comes as Walmart renews efforts to penetrate the South African market with its own store brands. Shares fell as much as 4.05% in Johannesburg trading, extending the year-to-date decline to 4.2%.

The company warned that low single-digit selling-price inflation will likely persist through the second half. This margin pressure reflects the intense competition in South Africa's grocery sector, where retailers battle for market share through pricing strategies. Shoprite's approach of sacrificing margins for volume growth shows the lengths retailers will go to defend their market position against global competitors like Walmart.