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Johannesburg - Shares in retailers Shoprite and Truworths fell on Friday after their latest sales figures disappointed investors, rekindling concerns about the prospects for some of Johannesburg's most expensive stocks.
Retailers are struggling with lacklustre consumer spending due to slow growth and high levels of household debt and analysts see little immediate upside for the sector given the high valuations.
Shoprite, a grocer that also has operations in Nigeria and Zambia, said on Friday sales increased by 9.6% in the six months to end-December. Comparable store sales were up 4.3%.
Its shares slid nearly 4% to R152.61. Even after a 19% slide last year, Shoprite is still trading at a price-to-earnings ratio of nearly 24, making it one of the ten most expensive stocks on the benchmark Top-40 index.
Clothing retailer Truworths reported a more than 50% fall in first-half sales growth after the market closed on Thursday, to 7%.
Comparable store sales increased by just 1%. HSBC cut its target price on the stock by nearly 11%, to R74, citing "strategic concerns around pricing architecture against product relevance."
Its shares dropped 2.2% to R76.25.
Separately, clothing and furniture retailer Foschini Group said its 9-month sales to December 28 increased 9%, with comparable store sales rising by 4%.
Foschini shares were little changed at R96.34 at 08:44 GMT.
Official data on Wednesday showed industry-wide retail sales grew at 4.2% in November, year-on-year, far outstripping the 1 percent economists had expected.
Household debt is around 75% of disposable income, making South African consumers highly sensitive to credit tightening and inflation.
Retailers are struggling with lacklustre consumer spending due to slow growth and high levels of household debt and analysts see little immediate upside for the sector given the high valuations.
Shoprite, a grocer that also has operations in Nigeria and Zambia, said on Friday sales increased by 9.6% in the six months to end-December. Comparable store sales were up 4.3%.
Its shares slid nearly 4% to R152.61. Even after a 19% slide last year, Shoprite is still trading at a price-to-earnings ratio of nearly 24, making it one of the ten most expensive stocks on the benchmark Top-40 index.
Clothing retailer Truworths reported a more than 50% fall in first-half sales growth after the market closed on Thursday, to 7%.
Comparable store sales increased by just 1%. HSBC cut its target price on the stock by nearly 11%, to R74, citing "strategic concerns around pricing architecture against product relevance."
Its shares dropped 2.2% to R76.25.
Separately, clothing and furniture retailer Foschini Group said its 9-month sales to December 28 increased 9%, with comparable store sales rising by 4%.
Foschini shares were little changed at R96.34 at 08:44 GMT.
Official data on Wednesday showed industry-wide retail sales grew at 4.2% in November, year-on-year, far outstripping the 1 percent economists had expected.
Household debt is around 75% of disposable income, making South African consumers highly sensitive to credit tightening and inflation.
