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Massmart flags slower sales growth

Sales up 0.5% to R42.5 billion in the six months to the end of June.

JOHANNESBURG – South African retailer Massmart reported a sharp slowdown in half-year sales growth on Monday as its home market slipped into recession.

Massmart, a unit of Wal-Mart Stores, said total sales rose 0.5% to R42.5 billion ($3.28 billion) in the six months to the end of June, as weak consumer spending and low consumer confidence weighed on its business.

Sales increased 8.7% in the same period last year.

Massmart’s home market and by far its largest revenue source has slumped into its first recession in eight years, data released last month showed, with political turmoil sending business and consumer sentiment to multi-year lows.

The company, which sells food, general merchandise and household appliances in 13 African countries, said its comparable stores sales decreased by 1.6%. 

Consumer spending was weak, especially on discretionary items, it said in a statement.

While food and liquor sales rose 3%, general merchandise, home improvement and mobile device sales decreased 2.9%.

Upmarket food and clothing retailer Woolworths last week cited difficult trading conditions as it flagged a lower full-year profit.

($1 = R12.9654)

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Stephen Katzenellenbogen

Stephen Katzenellenbogen

NFB Private Wealth Management
Moneyweb Click an Advisor
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