Retail sales at the owner of the Edgars, Jet and CNA chains fell 1.7% to R8.69bn in the three months to the end of December, Edcon said on Friday. Cash sales climbed 4%,while transactions settled at a later date dropped 9.9%.
South African retailers and consumers are under pressure as the country’s worst drought in more than a century pushes prices higher, with December food inflation climbing to 5.8%. Meanwhile, a weakening rand prompted the central bank to raise interest rates 50 basis points in January, increasing repayment costs for those with loans or mortgages.
"The overall trading environment remained challenging during the current quarter primarily due to higher income taxes, rising unemployment, rising interest rates and a sharp depreciation in the rand," the company said.
Bain Capital Partners, based in Boston, US, bought Edcon for about R25bn in 2007 to tap into rising economic growth in Africa’s second-largest economy. The deal burdened the retailer with debt, which increased 4.1% to R22.6bn year-on-year.
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