Shares in Shoprite rise on sales growth
JOHANNESBURG - Shoprite shares rose almost 5% on Wednesday after it reported robust sales growth driven by its core South African supermarkets business, even as a tough economy weighs on consumer finances.
The retailer, which also runs Checkers and Usave chains in its home market, has managed to shrug off high levels of unemployment, rising living costs and slow growth in South Africa that have hurt many consumer-focused firms.
It said it had grown its total sale of merchandise by 7% to 81.2 billion rand ($5.62 billion) in the six months to Dec. 29, with its South African supermarkets business growing sales by 9.8%.
“All three supermarket brands... traded well in a tough market,” it said in an operational update, adding that its liquor business had also grown sales by 20.5%.
Its shops outside of South Africa however continued to be hurt by currency devaluations and volatility in markets like Angola, Zambia and Nigeria, and as a result its non-South African business reported a 3.1% decline in sales.
Sales in its furniture division also dropped by 2.7% following store closures and, it said, scheduled power cuts by South Africa’s ailing power utility Eskom, which is struggling to keep the lights on amid severe financial woes.
Its shares were up 4.6% by 11:50am.