Retail Shares We share your pain
Last Tuesday dawned bright and bleak for South Africa’s retailers, with many of their shares losing value (and here by way of interest we will against our custom include the clothing fellers) for eg: Woolworths down 4.31% to R63.49, Foschini down 5.2% to R124.40, Massmart down 3% to R181 and Mr Price down 5.25% to R126.25. Shoprite shares, you will recall, dropped 5.93% to R188 on the release of a fine but not great set of interims; this was their worst performance since a similar drop in the year 6. The food and drug retailers’ index closed 2.74% lower last Tuesday, while the general retailers’ index closed 3.79% down. Why all the sad faces, punters? As usual, the analysts have come out of the woodwork with some, shall we say forensic predictions, ahem. SA’s retail shares have been running a little hot, they say, as foreign investors hyped on the continent’s growth prospects get in on the action, while the top retail companies have averaged PE ratios of 30, or double the rest of the index as retail counters have failed to the factor in the possibility of a consumer slowdown which, it now appears, is upon us.
Comment: Better polish the family silver, boys, and put it on Gumtree if you want to open that new DC.