Clicks Group Ltd., a South African beauty and pharmaceutical retailer, said first-half sales slowed as consumers held off major shopping trips to take advantage of January discounts.
Sales climbed 11.6 percent to 7.7 billion rand ($679 million) in the 21 weeks through Jan. 19, with selling price inflation of about 3.5 percent, the Cape Town-based company said in a statement today. That compares with sales growth of 11.7 percent in the 18 weeks to Dec. 30, 2012, a period that didn’t include the boost provided by January markdowns.
South African retailers have reported weaker sales growth this year as rising unemployment and inflation curbs spending. The Reserve Bank increased its benchmark interest rate by half a percentage point to 5.5 percent yesterday, which could weigh on economic growth, already at the slowest pace since the 2009 recession.
Clicks saw “the continued shift of consumers deferring their purchases until after Christmas to benefit from markdown sales in early January,” Chief Executive Officer David Kneale said in the statement.
Sales at UPD, the company’s wholesale and distribution unit, climbed 19.5 percent, compared with 20.3 percent a year earlier. Clicks said Oct. 24 that it plans to spend 338 million rand in fiscal 2014 as it invests in automated systems, expands its wholesale and distribution unit, and adds new stores.
Clicks shares gained 0.7 percent to 55.30 rand at the market close in Johannesburg. The stock has fallen 12 percent in the month to date.