Blanket of gloom over retail
Woolworths’ update shows food also affected
A grim trading update from Woolworths on Friday dealt a hefty blow to already weak investor sentiment towards the retail sector. The sector has been knocked by a series of grim updates and results in recent weeks. Woolworths’ update stands out as it provides troubling evidence that the tough trading conditions are now affecting food sales as well as nonfood sales. On Friday, analysts said investors would also be disappointed that the Australian business, which provides about 40% of group earnings, was unable to act as a counter to the difficult South African conditions. The update saw the share price head back to levels not seen since before the R10bn rights issue in 2014 at the time of the R23.5bn David Jones acquisition. On Friday Woolworths closed at R67.81 following the disappointing update for the first 19 weeks of financial 2016. Analysts said although the update was disappointing, it was not unexpected. "This has been a long time coming," said Sasfin analyst Alec Abraham. "Gi...
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