Mr Price Down on Weak Sector Sales Updates: Johannesburg Mover
Mr Price Group Ltd. (MPC), the South African clothing and furniture chain, fell the most in more than three months as weak sales data from competing retailers prompted a sell-off across the industry.
Shares in Mr Price declined 5.3 percent to 126.25 rand in Johannesburg, the biggest drop since Oct. 8. About 2.7 million shares changed hands, or 2.3 times the three-month daily average.
The stock sale is a result of disappointing trading updates from other retailers, an indication that South African consumers are under pressure, according to Diane Laas, an equity analyst at Investec Asset Management.
“Shoprite put out a very disappointing trading statement yesterday followed by one from AVI Ltd. today,” she said by phone from Cape Town.
Shoprite Holdings Ltd. (SHP), South Africa’s largest food retailer by market value, said yesterday it’s December sales grew 11 percent compared with 16 percent a year earlier. AVI Ltd. (AVI), a company owning food and clothing brands, said today its sales for the half-year through December will probably be a lower-than-expected 11 percent higher compared with 8.6 percent in 2011.
The AVI and Shoprite statements “are the first signs of poor volumes and consumer strain” in the numbers of the listed retail companies, Laas said. South African household spending is expected to slow to 2.6 percent this year, the lowest since 2009, Standard Bank said today.
Mr Price fell for a sixth consecutive day, its longest streak since August 2009, and was the worst one-day performer in the 11-member (JGENR) FTSE/JSE Africa General Retailers Index. The Foschini Group (TFG), South Africa’s third-biggest clothes retailer, declined as much as 10 percent, the most since October 2008, before paring its loss to close 5.2 percent lower at 124.40 rand.
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