Slow economic growth squeezes South Africa's Shoprite Q3 turnover

By: Reuters

Last Updated:

South Africa's grocer Shoprite Holdings said it was hit by weaker economic growth and lacklustre demand. Photo: Wikimedia

South Africa's grocer Shoprite Holdings on Monday reported slowing third quarter sales, hit by weaker economic growth and lacklustre demand from its core customers.

Africa's largest retailer said turnover for the three months to September rose 6.7 percent compared to a 12.3 percent increase in the same period last year.

"The core customer base of its flagship Shoprite chain in particular remained under pressure from mining job cuts, rising electricity costs, labour instability and lack of job creation," the company said in a statement.

Third quarter performance was also affected by fewer store openings but Shoprite said it expected better sales in festive season.

Shares in Shoprite were down 4 percent at 152.50 rand at 0900 GMT falling short of a 0.5 percent rise in the Johannesburg Securities Exchange's General Retailers index.

Consumers in Africa's most advanced economy are tightening their belts amid rising interest rates, higher energy costs and the first income tax hike in more than a decade.

South Africa's reserve bank cut 2015 growth forecast to 1.5 percent in September mainly due to contractions in agriculture, mining and manufacturing.