Shoprite sales soar in SA, drop in Africa

Africa's biggest grocer increased sales in its South African market, countering a drop in turnover in operations elsewhere in Africa.

BOE retail analyst Shanay Narsi said the number was a bit weaker than expected and attributed this to the translation effect of a stronger rand on revenues from stores outside South Africa, as well as rapidly falling food inflation.

He also said the lack of new space was limiting growth from African operations which had been growing at a rapid pace a year ago.

"Africa is still doing well, but the numbers highlight that space expansion is necessary to maintain the rate of growth observed over the past few years" said Narsi.

Another factor impacting the group is that Shoprite, which sells to the lower-end retail market in South Africa, has a high proportion of commodities, many of which are experiencing deflation.

The group said internal food inflation had dropped to below 3% in December.

Shoprite Holdings chief executive Whitey Basson said its South African supermarket operation fared the best of its various divisions, increasing total sales by 14.6% and by 9.1% on a like-for-like basis.

The group's furniture division grew sales by 11.5% for the six months under review. Basson said this was against the background of a furniture industry that was even harder hit by the economic downturn.