Massmart to open 13 more stores this year as group sales grow

123RF

Massmart reports in weeks rather than months, with its last financial year-end covering the 52 weeks to December 27. In the 21 weeks since then, group sales have grown 9% compared to the first 21 weeks of its 2015 financial year.

Excluding the new store openings, sales increased 6.7%.

Since Walmart acquired a controlling stake five years ago, Massmart has aggressively moved into the grocery market. Hayward said food and liquor sales grew 11.5% while its traditional general merchandise and home improvement divisions grew sales only 0.5%.

Its "Masscash Retail" division reported total sales growth of 21.4%, falling to 13.3% if new stores were excluded.

"Retail's total sales are boosted by the great performances from five new stores opened since May last year. Sales inflation was 7.2% in Masscash," Hayward said.

A fire that destroyed its Jumbo Crown Mines store in February and three store closures limited its wholesale divisions's growth to 5.7%. Massdiscounters - which houses its Game and DionWired chains - experienced total sales growth of 7.9%.

"Game's sales growth in SA is adversely affected by strong sales of load shedding and associated products in the prior year, as well as pressure on general merchandise sales.

"Although trading conditions across most African countries remain difficult, Game Africa's total rand sales growth is 29.4% and comparable sales growth 9.5%," Hayward said.

"Severe currency weakness and associated illiquidity in certain countries is causing short-term unrealised foreign-exchange translation losses and lower reported rand profits.

"DionWired's total sales growth is 10.4% as it benefits from good strategic focus and execution." Hayward estimated the group's stores that have been opened in SA since January 2015 contributed 1,300 permanent and 5,000 temporary or indirect jobs.

Massmart said its next sales update is for the 26-week period ending June 26 will be released in mid-July.

Source: BDpro