October 30, 2017 / 8:27 AM / 2 months ago

UPDATE 1-Rest of Africa weighs on South Africa's Shoprite Q1 sales

(Recasts with details)

JOHANNESBURG, Oct 30 (Reuters) - Shoprite increased turnover 6.4 percent in the three months to end-September, buoyed by South African sales, but with weaker commodity prices weighing on in its business in the rest of Africa.

Africa’s largest grocer grew South African sales 8.1 percent in the three months to end-September as it kept price increases low amid weak economic growth, the company said on Monday.

Shoprite, which has stores in 15 African countries, said it slashed the prices of staples such as maize meal and potatoes in its South African home market, reducing the company’s internal inflation to 0.9 percent across all products, compared with 7.2 percent a year ago.

“Stripping out the effect of inflation, the real sales growth surpassed the prior year’s growth in the same quarter,” the company said in a statement.

But sales growth in Angola slowed “significantly” from an increase of 110 percent the previous year, the company said without giving more detail.

Shoprite’s supermarkets outside South Africa reported a 1.8 percent drop in turnover mainly due to the impact of lower commodity prices and weaker currencies in Angola, Nigeria and Zambia, the company said.

Shares in Shoprite were down 3.2 percent to 200.82 rand, compared with a 0.1 percent drop in the JSE’s benchmark Top-40 index. (Reporting by TJ Strydom; Editing by Ed Stoddard)

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