Bloomberg and Reuters

Half-year revenue at Shoprite advanced 14 percent to R46.7 billion on the back of higher domestic sales and a weaker rand, the country’s largest retailer by market value said yesterday.

Sales for the six months to December rose 6.9 percent on a like-for-like basis, the Cape Town-based company added, supported by a 6.2 percent increase in South Africa, its biggest market. Total sales at non-South African supermarkets rose 28 percent, due in part to a declining rand.

The rand retreated 7.4 percent in the six months to December amid a slowdown in economic growth caused in part by widespread strikes in the mining industry, data compiled by Bloomberg show.

Food prices for Shoprite climbed on average 4.3 percent in the six-month period, lower than the official figure of 5.9 percent, the company said.

Shoprite shares declined for a fifth consecutive session yesterday, the longest losing streak since September 5. The stock traded 5.93 percent lower to close at R188, dragging down others such as Woolworths and Spar Group

Sales for the month of December were 11 percent higher than the corresponding period a year ago, below the 14 percent figure for the six-month period.

“It is the disappointing sales growth in the festive season and that’s probably the main reason driving the share price down today,” Michael McLeod, an analyst at Avior Research, said yesterday.”

“Sales growth across the sector is very good, they've good exposure in other African countries, but the problem is they are priced for perfection," said Andrew Newell of Cannon Asset Managers in Johannesburg. “

“I think the general view is that the numbers are little bit light, not quite at the levels people were expecting,” said Reuben Beelders, chief investment officer at Gryphon Asset Management in Cape Town.

"The trend is down. I don't think this should be unexpected because the retailers have reported so many years of growing revenues and at some point there should be a slowdown," Beelders said.

Furniture sales advanced 4.8 percent during the half year, Shoprite said.