Shoprite Sales Growth Slows in December on Consumer Weakness

Shoprite Holdings Ltd., Africa’s largest food retailer, said sales growth slowed toward the end of its fiscal half through December after weaker consumer spending led to a tougher trading environment.

“The pace of growth in the first three months of the reporting period was not maintained in the second, when the retail sector as a whole experienced a slow-down,” Chief Executive Officer Whitey Basson said today in a stock-exchange statement.

Net income advanced 19 percent to 1.7 billion rand ($191 million) in the half-year period, from 1.43 billion rand a year earlier, the Cape Town-based company said in the statement. Sales rose 14 percent to 46.7 billion rand, with its core South African market underperforming with a 12 percent gain in a “sluggish trading environment”.

South African retail sales growth weakened in December as high unemployment and rising inflation curbed consumer demand. Inflation rose to 5.7 percent in the month.

Shoprite shares fell as much as 3.3 percent, the most in more than two weeks, and were down 2.7 percent at 173.25 rand at 10:12 a.m. in Johannesburg. The company raised its dividend for the six month period by 13 percent to 123 cents a share.

Shoprite had an exchange-rate loss of 41.4 million rand, compared with a gain of 27.7 million rand a year earlier, as the Malawian kwacha slid.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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