Woolworths Reports 16% Sales Growth

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VENTURES AFRICA – Woolworths Holdings, the JSE-listed food and clothing retailer, on Thursday said sales for the first 20 weeks of the new financial year shot up impressively.

It said group sales surged 16 percent over the comparable period in 2012 and sales in comparable stores grew by 9.9 percent.

Economists said the numbers suggest that domestic demand remained relatively firm.

They said low interest rates, unsecured lending and above-inflation wage increases would continue to provide some support for retail sales over the coming months.

But the growth rate would be contained by low consumer confidence and lack of job growth.

The risk to domestic economic growth remained on the downside, given the strain coming from a weaker global economy and the current waves of industrial action sweeping across the country.

At the September meeting of the Reserve Bank’s Monetary Policy Committee, the Committee had kept the repo rate – the rate at which the reserve bank lends to commercial banks – unchanged at 5 percent in line with market expectation.

Woolworths said clothing sales in SA lifted by 13.7 percent with a price movement of 5.8 percent. Sales in comparable stores grew by 8.2%‚ the retailer said.

Meanwhile‚ food sales grew by 11.2 percent with a price movement of 7.3 percent‚ and sales in comparable stores grew by 7.8 percent.

“General merchandise grew by 11.5 percent and by 9.5 percent in comparable stores‚” the company said.

Woolworths’s retail space‚ including stores in the rest of Africa‚ grew by 5.2 percent‚ net of closures and excluding franchise conversions.

Sales in Australia and New Zealand increased 36.9 percent‚ in Australian dollar terms. Witchery and Mimco’s sales are included from the effective date of the acquisition on September 30.

“Sales in comparable stores increased by 12.2 percent and net space‚ excluding the acquisition‚ contracted 2.1%. Country Road’s South African sales are included in the South African clothing‚” it said in a statement.

The Woolworths Financial Services debtors’ book reflected year-on-year growth of 10.9 percent at the end of October‚ with the impairment rate for the four months to October at 1.8 percent.

The group’s interim results for the 26-week period to December 23 are scheduled to be announced on or about February 14.