Food retailers feel pinch in lower inflation

AFRICA'S largest food retailer Shoprite said yesterday that headline earnings a share for the 12 months ended June this year would be between 25percent and 35percent higher than a year ago.

AFRICA'S largest food retailer Shoprite said yesterday that headline earnings a share for the 12 months ended June this year would be between 25percent and 35percent higher than a year ago.

But with inflation declining going forward, food retailers particularly will be under pressure to manage costs.

Said a fund manager: "The big story in Shoprite is the same as all of the food retailers at the moment. That inflation and the rate of decline of inflation is coming down".

If one of two things don't happen - if volumes are not lifted or more general merchandise is not sold, things will be extremely tough for the next period.

The question facing fast-moving consumer goods companies is what happens if expenses growth runs ahead of inflation growth. - Adele Shevel

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