Shoprite jumps most since 2008

Johannesburg - Shoprite Holdings [JSE:SHP] rose the most in almost eight years after Africa’s biggest food retailer said growth in full-year sales accelerated, led by gains at stores outside its home market of South Africa.

Shoprite surged as much as 9.3% to R191.47 a share in Johannesburg, the highest since January 2013 on a closing basis and the biggest gain since September 2008.

The stock was 7.93% higher at R188.99 by 12:38, with 2.34 million shares traded, more than 100% of the three-month daily average.

Turnover for the 12 months, or 53 weeks, through June increased 14.4% to about R130bn, the Cape Town-based company said in a statement late on Tuesday.

On a 52-week basis, which was more comparable to the previous period, turnover rose 11.6%, against an 11.2% gain a year earlier, while the increase in sales from supermarkets outside the country accelerated to 29% from 16%.

Gains elsewhere on the continent were achieved "despite the impact of lower commodity prices and the devaluation of certain currencies" relative to the rand, Shoprite said.

Supermarkets, which reported a sales increase of 10.9%, also managed an improved trading performance in the second half of the year, the company said.

Shoprite and Pick n Pay Stores [JSE:PIK] are among other retailers succeeding in growing sales, despite headwinds including weak domestic consumer confidence, rising interest rates and a slump in the rand, which has declined 13% against the dollar over the past 12 months.

The International Monetary Fund forecasts economic growth for the country this year of 0.1%, which would be the slowest pace since a 2009 recession.