Truworths leads the plunge
Johannesburg – Truworths International Ltd. led a decline in South Africa’s consumer stocks, which fell the most in a month as spending contracted for the first time since 2009.
The FTSE/JSE Africa General Retailers Index dropped as much as 2.6 percent, the biggest intraday fall since February 14, and traded 1.4 percent lower at 62,886.01 at 4:18 p.m. in Johannesburg.
Truworths, South Africa’s biggest clothing retailer by market value, declined 2.6 percent.
Mr Price Group, a clothing and furniture chain, fell 1 percent.
Both have declined about 15 percent in the year to date.
Lewis Group, a furniture and appliance retailer, sank 0.3 percent.
South African retailers have suffered share price declines this year after trading updates showed slower sales growth amid rising unemployment and lower consumer spending.
Gross domestic demand fell an annualised 0.9 percent in the final three months of 2012, the first fall since 2009, compared with an expansion of 4.1 percent in the previous three months, the Reserve Bank said in its Quarterly Bulletin released in Pretoria today.
Growth in consumer spending, which accounts for about 60 percent of total spending in the economy, slowed to an annualised 2.4 percent in the final three months of last year from 2.7 percent in the third quarter, the bank said.
“Household consumption expenditure continued to be constrained by slower growth in disposable income of households and rising inflation,” the bank said. – Bloomberg News