JOHANNESBURG – South African supermarket group Shoprite said on Tuesday that trading conditions in its local market, where the economy is in recession, remained challenging in the second half of its financial year, sending its shares lower.
The company is pursuing a strategy of pushing upmarket as spending by wealthier households remains undented by the downturn.
“The challenging trading conditions in South Africa continued in the second half of the year and the South African supermarket operation increased sales by 10.1 percent,” the company said in a trading update.
But it said on a “like-for-like basis” – a comparison which usually excludes the affects of expansion or acquisition – sales increased by a more moderate 6.9 percent.
Elsewhere in Africa, Shoprite said it “recorded sales growth of 13.5 percent, mainly due to the impact of lower commodity prices and the devaluation of certain currencies.”
Shoprite’s shares extended a decline to 3.4 percent on the announcement.