Shoprite lifts profit, cautious on outlook

| Wednesday February 24, 2010 00:00

Shoprite, which caters for the lower end of the retail market, said yesterday headline earnings per share rose to 208 cents in the six months to end-December and gave a cautious outlook for the rest of the year. The Cape Town-based company said sales rose 11.9 percent to 33.1 billion rand with its grocer unit affected by a drop in food inflation while its furniture unit booked more than 11 percent sales growth.

Retailers in Africa's biggest economy are back in favour as the economy crawls out of a recession and lower interest rates bolster consumer buying power but the outlook for the rest of the year is dicey due to high debt levels and job losses.

Shoprite said it expected 'little change' in market conditions for the rest of the fiscal year as a rise in job losses offset lower food prices.South Africa's retail sales fell by a less-than-expected 3.7 percent year-on-year in December, the latest data shows, reflecting still weak consumer demand.

Shares in Shoprite, which have gained more than 16 percent so far this year, were down 1.22 percent to 76.01 rand by 0720 GMT, lagging a slightly higher JSE Top-40 index of blue chips.-(Reuters)