Johannesburg - Shoprite Holdings [JSE:SHP], Africa's biggest
grocer, reported a 14% increase in first-half sales on Monday, disappointing
investors who had expected a bigger increase from the fast-growing retailer.
Shares of Shoprite tumbled more than 3% after it said sales
totalled R46.7bn in the six months to end-December.
The Cape Town-based company, which operates in 17 African
countries outside South Africa, said sales in those stores grew by 28% while
its core South African business increased sales by 11.5%.
"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.
"Also the trend is down. Retailers have reported so
many years of growing revenues, I think at some point there should be a
slowdown. The price has run incredibly hard."
Domestic retailers, which are also expanding into the rest
of Africa, have been the darlings of investors in recent months but many
analysts have said shares have been pushed to unjustifiable levels.
South African consumers are also battling with high personal
debt levels, rising electricity prices and chronic unemployment but
above-inflation wage hikes, government grants and decades-low interest rates
have somewhat softened the blow.
Shares of Shoprite were down 3.7% at R192.46, making it the
biggest negative contributor to the benchmark Top 40 - (Tradeable) [JSE:J200]
index.
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