THERE are some signs that the long-running love affair with South African retailers is starting to run out of steam in the local market. On Wednesday, the star performer among the fashion and homeware retailers, Mr Price, reported 35% growth in its interim earnings to end September.

Not many retailers in South Africa, let alone in struggling and slowing Europe can report such figures. Yet, despite those numbers, the Durban-based company’s shares fell as much as 2.7%.

It did stage something of a comeback to close just under 1% lower by close of trade, but there’s definitely a change in thinking when it comes to the sector.

In the case of Mr Price, rand weakness is driving up the cost of goods bought from Asia. Over its first half, the rand weakened 9% against the dollar.

In its results, Mr Price reported retail sales growth of 13.9%, which was just a tad higher than the 13.5% rise in costs and expenses.

By any stretch, it’s not a comfortable figure.

Judging by share price performances in the past two weeks, there’s a bit more digging going into the South African retail story than we’ve seen before.

And it’s not specific to Mr Price either. Spar, which reported a more than 9% rise in headline earnings per share on Wednesday, saw its shares close 3.6% lower.

With a weakening rand — the currency has shed more than 3% over the past week — and retail data that reflected a slowdown, it was a bad day across the board for retailers. Both Truworths and Woolworths lost more than 3% in value.

Real retail sales growth in September slowed to 4.3% year on year, from 6.7% in August. It is the third consecutive quarter of slowing growth since a 7.7% year-on-year peak in the final three months of last year.

What’s happening in the nuts and bolts of the economy is finally having an effect on the South African consumer and stocks directly exposed to them.

South African retailers, because of their sophistication in emerging markets, have benefited most from the fallout with commodity shares after the 2008 recession. Growth has been quite staggering. It has been propelled to such heights by foreign investors looking for a better yield and escaping the anaemic growth rates of retailers in their domestic markets.

Since September 2008, the listed retail index has almost tripled in value. Resources on the other hand have fallen 9.6% as lower commodity prices have in some cases severely dented earnings.

Mr Price trades on a price:earnings ratio above 30.

Shoprite and Woolworths are nearing those levels pretty soon. Truworths and Foschini are trading in the mid-to high teens.

Taking into account the muted response to Mr Price’s and Spar’s results and their high valuations, there should be some repositioning. Foreigners ignoring commentary over just how heated the sector is are probably focusing on the promise of expansion into the rest of Africa.

It’s a great story, but one that won’t be fulfilled as soon as some are hoping for, and along the way some companies may not cut it.

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THIS month, the share price of Anglo subsidiary Kumba Iron Ore has fallen nearly 6% as the outlook for the metal dims because of its close links with the Chinese economic story.

It’s a story unlikely to feature commodities as a central character in the next decade.

Earlier this week, Kumba, which is close to 70%-owned by Anglo, warned that profit will drop at least 20% because of falling prices and a strike at its Sishen mine in the Northern Cape.

An unlikely beneficiary from the woes that came to beset Anglo’s cash cow of the past couple of years may be ArcelorMittal SA.

The local arm of the Lakshmi Mittal empire has been operating under a cloud of an ore supply dispute with Kumba for more than two years. The steel industry, both at home and abroad, has not been kind. ArcelorMittal SA is trading at its lowest since June 2004.

The parties are involved in talks to extend an interim supply agreement while arbitration continues next year. If at the end of the day, the steel maker loses its supply deal with Kumba, which was signed in 2001, it may not face the prospect of iron-ore prices as they were in 2010 when the deal was first said to have lapsed.

If the parties can tie down a long-term contract on lower prices, they may be in a better place when the global economy does eventually bounce back.