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Shoprite sales disappoint, shares drop

Jan 14 2013 12:15 Reuters

Company Data

SHOPRITE HOLDINGS LIMITED [JSE:SHP]

Last traded 0
Change -2
% Change 0
Cumulative volume 1170537
Market cap 104.55bn

Last Updated: 27-01-2015 at 04:28. Prices are delayed by 15 minutes. Source: McGregor BFA

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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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