Massmart Holdings reported a 0.5% increase in total sales and a 2.5% increase in headline earnings compared to the same period in 2016. This comes in a difficult consumer sales environment characterized by pressure on discretionary consumer spending on general merchandise, according to the Massmart interim report, released in August this year. The report is based on figures from the 26 week period ending 25 June 2017.
“The last six months rank among the most difficult trading conditions retailers have faced in recent memory,” Massmart CEO, Guy Hayward, said at the investor presentation.
In the Massdiscounters division, comprising of Game and Dionwired, total sales decreased 1.4% and comparable store sales decrease 3.5%, with product inflation of -0.3%. According to the report the division managed expenses which in total were lower than the comparable period and reduced its inventory value to below that in June 2016.
Masswarehouse, comprising of the 20-store Makro warehouse-club; and Massfresh, which houses the Group’s fresh produce, meat and bakery operations, reported a 4% total sales increase with comparable sales up 1.5%. Total sales growth in food and liquor was 6.9%, while general merchandise sales at Makro were impacted by lower discretionary spending. Expense management saw expenses declining 1.6% while inventory levels were reduced to below those in the same period last year.
“Continued high levels of economic volatility and political uncertainty complicate any useful outlook. However, when compared to the first half of 2017, it is likely that sales growth may improve slightly in the 2nd half of the year,” Howard concluded.