Shoprite [JSE: SHP] shares fell more than 4% on Tuesday morning before recovering somewhat following the release of a weak operational update which showed turnover as flat over the six-month period ending in December 2018.
The retailer's stock opened at R184 on Tuesday morning and fell more than 4%, before recovering to trade 2.45% weaker at R181.44 at 11:30.
Group total turnover increased by a mere 0.03% to R72.9bn during the six months. Taking into account Angolan hyperinflation, the group's turnover declined 0.01%.
While the group's core business, supermarkets in South Africa, grew sales by 2.58%, Shoprite's non-South African division of supermarkets recorded a decline in turnover of 13.27% in rand terms, which impacted overall group sales performance.
"This was primarily a result of sharp devaluations in the currencies of the major countries in the rest of Africa negatively impacting the sales performance in rand terms," said the group.
Angola operations performance declined 44.95% in rand terms after a 85.13% devaluation in the Angolan currency since January 2018, the group said.
"This was a severe drag on the performance of the group given the size of the Angolan operation. The Angolan economy remains in recession with weaker consumer spending evidenced in the second quarter.
"Excluding Angola, Supermarkets Non-RSA managed to achieve a positive sales growth of 4.41% in constant currency," the review read.
Over the period the group opened 50 new supermarkets, and it plans to open another 37 before June 2019.