Shoprite has reported profit that matched estimates as growing pressure on consumers' disposable income held back sales in its domestic market.
Net income rose 19% to R3.62-billion in the 12 months through June, South Africa's largest retailer said on Tuesday in a statement. That was broadly in line with the R3.63-billion average of 12 analyst estimates compiled by Bloomberg. Full-year revenue growth at the domestic unit's supermarket operation weakened to 9.8% compared with 12.9% a year earlier.
"Growth within South Africa was hampered during the year by widespread labour unrest, rising costs fueled by a weak rand, falling commodity prices and consumers' lack of disposable income due to their high level of indebtedness," chief executive Whitey Basson said in an emailed statement.
Shoprite shares fell 0.9% to R1560.15 by 9.55am in Johannesburg, in line with the FTSE/JSE Africa Food & Drug Retailers Index. The company raised its final dividend 11% to 215 cents per share.
South African retail sales rose at the slowest pace in eight months in June as flagging economic growth and rising joblessness curbed consumer spending. The unemployment rate climbed to 25.6% in the second quarter from 25.2% in the previous three months, as the labour force expanded and the retail, finance and construction industries cut jobs. - Bloomberg