* Headline EPS up 8 pct to 341 cents
* Sales up 9.7 percent at 51 billion rand
* Shares touch lowest level in almost two years (Adds CEO comment, background)
By Tiisetso Motsoeneng
JOHANNESBURG, Feb 25 (Reuters) - Shoprite, Africa's biggest retailer by stores, reported its slowest first-half profit growth in eight years as its core South African low-income consumers struggled with high debt, job losses and rising fuel costs.
Retailers in Africa's biggest economy are among the worst- performing stocks in the past 12 months, reflecting investors' fears about the impact on consumer spending of tepid economic growth, rising fuel prices and high household debt.
"It's been a tough six months," Shoprite Chief Executive Whitey Basson told investors and reporters at the company's results presentation on Tuesday.
South Africa's economy hardly grew last year, official data showed on Tuesday, underscoring slack consumer spending that had boosted expansion closer to 5 percent before slipping into a recession in 2009.
Shoprite, which targets lower-income consumers with discounts on staples such as maize meal and potatoes, said headline earnings per share rose 8 percent to 341 cents in the six months to end-December, the slowest growth since 2005.
Headline EPS, the most widely watched profit measure in South Africa, strips out certain one-off items.
Sales rose 9.7 percent to 51 billion rand ($4.7 billion) with sales from its sub-Saharan outlets surging by about a third - more than three times the growth rate at home.
"What these numbers are telling you is: the consumer environment is incredibly tough in South Africa," said Reuben Bleeders, an analyst at Gryphon Asset Management.
Nearly a quarter of South Africans have no job in an economy where average household debt accounts for 75 percent of disposable income.
Two local retailers - Truworths and JD Group - have separately written off a total of more than $100 million of consumer debt in the six months through December.
Shares in Shoprite were down 2.6 percent at 140.00 rand by 1438 GMT, having touched their lowest in almost two years earlier on Tuesday. That brings losses so far this year to about 12 percent.
Based on a forecast 10.2 percent earnings growth per annum over the next five years, Shoprite should be trading at around 170 rand, according to Thomson Reuters StarMine.
To offset sluggish growth at home, Shoprite is looking to the rest of Africa - whose consumers, according to Basson, have an "insatiable appetite" for big brands.
"Five Shoprite stores in Angola sold more Red Bull cans than all 382 Shoprite stores in South Africa," Basson said, referring to the energy drink.
Shoprite plans to open 44 new outlets outside South Africa by the middle of 2015, most of which would in resource-rich countries: Zambia, Nigeria and Angola.
But it faces challenges in key markets such as Zambia and Nigeria, due to heavy regulation, a poor supply chain infrastructure and lack of shopping malls.
Shoprite pulled out of Tanzania earlier this year because it was unable to open enough stores to take on informal traders in the east African country.
It also agreed to a hefty pay increase late last year for its Zambian workers after authorities in the southern African country threaten to revoke its trading license.
($1 = 10.8545 South African rand) (Additional reporting by David Dolan; Editing by Erica Billingham)