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Johannesburg - Africa’s biggest food retailer Shoprite
Holdings [JSE:SHP] reported an 18.6% rise in first-half profit on Tuesday,
helped by higher prices, a favourable exchange rate and above-inflation wage
increases for consumers in its main South African market.
Shoprite, which runs discount chains, said headline earnings
per share totalled 280.8 cents in the six months to end-December compared with
236.8c a year earlier.
The results support data showing that consumer spending is
improving in Africa’s biggest economy due to decades-low interest rates and
above-inflation wage hikes for workers in several sectors, but the outlook is
uncertain due to high personal debt levels and unemployment.
South African retail sales jumped 8.7% year-on-year in
December, from an upwardly revised 7.2% growth in November and beating a 6.5%
slowdown economists had expected.
Shoprite, a domestic merchant seen likely to lose the most
from discounter Walmart’s entry into the country, has also benefited from store
expansion at home and across the continent.
Walmart and its 51%-owned unit Massmart Holdings [JSE:MSM]
are also due to report their results this week.
Shoprite said sales rose 13.2% to R41bn after
increasing prices by an average of 4.6% and gaining nearly R30m from favourable
currency swings.
Shares in Shoprite, which operates in other African countries
including Nigeria, Angola and Zambia, inched up 0.73% to R133.65 by 07:44 GMT.
The company’s stock has fallen more than 2% so far this year, lagging behind a 7% rise in the Top 40 - (Tradeable) [JSE:J200] index and reflecting views that domestic retailers are overvalued.
