retailers report strong growth



Three of South Africa's retailers released their third quarter trading updates yesterday, all showing strong growth.

Analysts had predicted a downturn in retail sales because of high interest rates and the National Credit Act, but consumers proved them wrong.

New Clicks posted double digit growth for the four months ended in December despite mounting pressure on consumers' pockets over this period.

Group sales were up by 13,1percent, but like-for-like growth (excluding new stores) was stifled to 9,3percent.

New Clicks owns Clicks and Clicks Pharmacy stores; retail music stores Musica and beauty products specialists The Body Shop.

"We expect retail trading to remain tough in 2008, but stock levels and markdowns are in line with expectations and management is confident of achieving strategic objectives," the group said yesterday.

South African listed retailer Mr Price Group yesterday reported a 14,6percent sales increase for the third quarter ended December with a comparable sales growth of 5,2percent.

The Mr Price Group third quarter trading update said cash sales constituted 85percent of total sales.

By yesterday afternoon Mr Price Group shares traded at R19,65 (- 0,76percent).

The group's sales grew by 11,5percent in October, 14percent in November, and 16,8percent in December. The company said comparable sales in December were up by 7percent and it recorded an inflation rate of 8,4percent.

The group said the figures reflected a continued impact of larger format stores in close proximity to smaller established stores as well as the effect of interest rate, fuel and food price increases on consumers who have reduced spending on home-related products. It recorded an inflation of 6,2percent for the home division.

Woolworths' drive to push up food sales through garage forecourt shops and smaller franchise owned stores helped grow revenue 16percent over the 26 weeks to December 23.

Though the retailer's trading update excludes the key trading day of December 24, it indicates a sharp slowdown from Woolworth's 23percent revenue growth in its last financial year.

After the update, disappointed investors sent the share down 2,5percent to R14.