Skip to main content

Retailers face weaker full-year results

Souring consumer sentiment in the second quarter of 2016 could hint at weaker full-year results from SA’s top retailers.

Consumer confidence as measured by the FNB/BER survey dropped to a reading of -11 in the second quarter of 2016 from a reading of -9 in the first quarter. Investec economist Kamilla Kaplan said, at this level, confidence remained entrenched below levels last seen during the 2008-09 recession. As a result, there would be dampened activity in the consumption side of the economy, said Kaplan.

Retailers due to release results in August include Shoprite Holdings and Woolworths. These retailers, who sit at opposite ends of the consumer scale, can be seen as a litmus test of how well shoppers are coping in the prevailing environment.

More than 70% of Shoprite Holdings’ revenue is earned from its supermarkets in SA. The retailer remains the largest in Africa. It has 357 shops in the rest of Africa, and plans to add 58 more by June 2017.

In its interim results for the period ended December 2015, CEO Whitey Basson said the company’s operations offshore could possibly offset the weak conditions at home. Shoprite would deliver "reasonable results" in the second half of the financial year, "provided the current economic climate does not deteriorate further".

In the past year, Shoprite Holdings’ share price has dropped about 2.81%, making it an underperformer in the Food & Drug Retailers index, which has seen growth of 2.56% in the same period.

Woolworths’s share price has taken even more of a beating, falling 19.38% in the past year. In the interim results statement for the year to end-December, CEO Ian Moir said as a result of the deterioration in the outlook for the global economy, conditions were expected to be more difficult in its main markets — namely SA and Australia.

In March, top executives in the company sold millions of rand worth of Woolworths shares. Moir offloaded shares worth R57m, while Woolworths SA CEO Zyda Rylands disposed of R12m worth of shares.

Pin It

Related Articles

Positive growth continues for The SPAR Group

SPAR Group turnover increased by 8.8% for the 24 weeks ended 15 March 2024, with a well-maintained policy of continued capital investment  across the wholesale and retail value chain.

Unaudited results for the 26 weeks ended 31 Dec...

Double-digit growth sees half year sales reaching R121 billion - Group sale of merchandise increased by 13.9% to R121.1 billion - Supermarkets RSA sale of merchandise increased by 14.6% to R97.5 billion - Diluted headline earnin...

Woolies online sales skyrocket — but still weak...

By: Staff Writer - MyBroadband South African fashion, home, and grocery retailer Woolworths saw online sales surge during the first half of its 2024 financial year. For the 26 weeks ending 24 December 2024, online sales in the fashion, beauty an...

Shoprite first-half sales rise 14%

By Andries Mahlangu - BusinessLive Africa’s biggest grocery retailer Shoprite reported robust growth in sales in the six months ended December, with all its various store formats coming to the party save for its furniture business.  It...

Port chaos and bird flu hit Woolworths sales

  By: Nick Wilson – News24 Shares in Woolworths fell nearly 2% on Tuesday morning after it warned that SA's sputtering economic growth, a bird flu epidemic, and port chaos contributed to volume declines in its local food and fashion busines...