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Festive retail hopes fizzle out

Jan 14 2010 14:41 Andile Makholwa

Company Data

Mr Price Group Ltd [JSE : MPC]

Last traded R99.30
Change R-0.70
% Change -0.70%
Cumulative volume 2.67m
Market cap R24.80bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

Massmart Holdings Ltd [JSE : MSM]

Last traded R159.70
Change R-0.49
% Change -0.31%
Cumulative volume 182,966
Market cap R34.51bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

Shoprite Hldgs Ltd Ord [JSE : SHP]

Last traded R134.85
Change R1.42
% Change 1.06%
Cumulative volume 1.31m
Market cap R76.94bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - Analysts have lowered their expectations for 2009 festive season sales figures, after retailer Mr Price [JSE:MPC] became the third retailer to perform below market expectations.

On Thursday, Mr Price disappointed markets when it reported third-quarter (to end-December) sales growth of 8.4% (compared to 15% growth over the same period the previous year).

This was a day after general goods retailer Massmart [JSE:MSM] warned shareholders its headline earnings for the 26 weeks to December 2009 would be between 16% and 24% lower than the previous year.

Food group Shoprite Holdings also fell short of what the markets expected, when it reported on Wednesday its turnover for the six months to December 2009 grew by 11.9% (27.3% growth in 2008).

Chris Gilmour, retail analyst at Absa Asset Management Private Clients, said the figures highlighted the extent to which South African consumers remain under pressure.

Gilmour said if value retailers such as Mr Price [JSE:SHP] - which traditionally produce good numbers during the festive period - disappointed, credit-orientated retailers such as Truworths and Foschini could not be expected to do better.

"This reflects just how bad consumer spending has become," said Gilmour. However, he raised hopes for better conditions in the current year. "This is more of a temporal situation."

Danie Pretorius of RMB Morgan Stanley said while Mr Price's prospects remain good, the reported figures could "make some people a little bit nervous" in terms of earnings as the group kept prices relatively low, against expectations that they would go up somewhat.

Nevertheless, Mr Price has entrenched itself in the youth market and is well positioned for future growth, said Pretorius.

Mr Price said the sales figures for the quarter were in line with expectations, taking into account recessionary conditions and the high base in the same quarter in the previous year when comparable sales were over 15% stronger.

In early afternoon trade on Thursday, Mr Price shares were down 0.71% for the day on the JSE to 3 500 cents per share.

- Fin24.com

 
 
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