Shoprite Jumps Most Since 1997 As African Sales Growth Rises
Shoprite Holdings Ltd. rose the most in almost 19 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 11.4 percent to 194.98 rand a share in Johannesburg, the highest since January 2013 on a closing basis and the biggest gain since October 1997. Almost 7 million shares traded, almost four times the three-month daily average.
Turnover for the 12 months, or 53 weeks, through June increased 14.4 percent to about 130 billion rand ($9.1 billion), the Cape Town-based company said in a statement late Tuesday. On a 52-week basis, which was more comparable to the previous period, turnover rose 11.6 percent, against an 11.2 percent gain a year earlier, while the increase in sales from supermarkets outside South Africa accelerated to 29 percent from 16 percent.
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. South African supermarkets, which reported a sales increase of 10.9 percent, also managed an improved trading performance in the second half of the year, the company said.
Shoprite and Pick n Pay Stores Ltd. are among South African retailers succeeding in growing sales, despite headwinds including weak domestic consumer confidence, rising interest rates and a slump in the rand, which has declined 14 percent against the dollar over the past 12 months. The International Monetary Fund forecasts economic growth for South Africa this year of 0.1 percent, which would be the slowest pace since a 2009 recession.
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