South Africa's Pick n Pay Stores Ltd. reported a 17 percent increase in full-year profit as the South African supermarket chain extended its fresh-produce range, opened stores and focused on keeping prices low amid weak consumer spending.
Earnings excluding one-time items climbed to 2.58 rand per share in the 12 months ending Feb. 26, the Cape Town-based company said in a statement on Wednesday. The median estimate of 14 analysts surveyed by Bloomberg was for adjusted earnings per share of 2.67 rand. Sales rose 7 percent to 77.5 billion rand ($5.8 billion).
“At all income levels, people are finding it harder to make ends meet -- they are demanding consistently lower prices and better value,” Chief Executive Officer Richard Brasher said in a separate statement. “In our low-growth economy, competition for the hard-pressed customer is going to be the new normal.”
South African shopping chains have sought ways to attract customers with limited spending money as a 2016 slowdown in economic growth hurt household incomes. Pick n Pay added 87 company-owned stores during the period, bringing the total to 890, including almost doubling the number of local convenience stores as it focused on communities in which it had not previously had shops.
The grocer raised the full-year dividend by 18 percent to 176.3 rand. The stock has gained 1.3 percent this year, valuing the company at 31.5 billion rand.
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