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Shoprite up as sales growth improves

Johannesburg - Shoprite, South Africa’s largest food retailer, said sales growth accelerated as the consumer spending environment improved.

The shares gained the most in four months.

Photo: Leon Nicholas. Credit: INDEPENDENT MEDIA

Revenue advanced 11.4 percent in the six months through June, compared with 9.7 percent in the first half of the fiscal year, the Cape Town-based company said in a statement today. Full-year sales growth on a like-for-like basis was 5.1 percent.

“This confirms the sales momentum is accelerating,” BPI Capital Africa analyst Luis Colaco said by phone from Cape Town.

“Growth on a like-for-like basis is good, that is positive.”

Revenue from outside South Africa, which accounts for almost a fifth of Shoprite sales, increased by 27 percent, little changed on the previous year.

Shoprite closed 3 percent higher, the biggest gain in more than three months, at 163.05 rand in Johannesburg.

That pared the year’s decline to 0.6 percent, valuing the company at 93.4 billion rand.

South African retail-sales growth was 1.8 percent in April, accelerating from a revised 0.8 percent gain in March.

The country’s inflation in May climbed to 6.6 percent, exceeding the central bank’s 3 percent to 6 percent target band for a second month.

Massmart, controlled by Wal-Mart Stores, said July 10 that sales growth rallied during the first half of 2014 as consumers spent more on building supplies amid a rise in the inflation rate. - Bloomberg News

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