Spar profit growth slows amid spending downturns
Financial pressure on consumers and tough competition has seen the retailer's food sales suffer in the first half of 2014.
Spar Group, a South African food and liquor retailer, said first-half profit growth slowed to 9.4% as demand for liquor and building materials failed to offset slower food sales.
Net income rose to R642.9-million in the six months through March from R587.6-million a year earlier, the Durban-based company said in statement on Wednesday. Profit by this measure climbed 13% in the first-half of fiscal 2013. Sales increased 7.6% to R25.6-billion rand.
“Trading conditions remain tough with ongoing pressure on consumer spending due to rising unemployment, increasing household debt and interest rates,” the company said. “Mine strike action has affected trading in certain rural regions through reduced disposable income.”
Spar sales of liquor and building products grew in double-digits, while food suffered from tougher competition, the company said. It declared an interim dividend of R1.95 a share, 8.9% higher than a year earlier.
South African retail sales growth slowed to 1% in March, from 2.3% the previous month, as high unemployment and inflation curbed spending.– Bloomberg