Pick n Pay Stores said first-half earnings gained 18% as the supermarket chain attracted shoppers with discounted goods and opened new stores.

Profit increased to R381.8m in the six months through August 28 from R322.5m a year earlier, the Cape Town-based company said in a statement on Tuesday. Sales rose 7.2% and the retailer opened 74 Pick n Pay and mostly rural Boxer stores in the period.

The company raised the interim dividend 24% to R2.99 a share.

Pick n Pay “is encouraged that the high levels of food inflation seen in recent months are beginning to alleviate,” the company said. Chief Executive Officer Richard Brasher’s long-term plan of a becoming more efficient, improving profit margin and increasing sales remains on track.

South African retailers are facing challenges including weak domestic consumer confidence, rising interest rates and unemployment of 27% in an economy that’s growing at the slowest pace since a 2009 recession.

Pick n Pay shares rose 1.8% to R66.04 by the close in Johannesburg on Monday October 17, the biggest gain since September 22.

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