Sales growth at Massmart outstrips inflation‚ but share price falls

File image of a Makro superstore in Milnerton, Cape Town. Makro is housed by Masswarehouse, a division of Massmart.

Picture: Wikimedia Commons

Massmart’s sales update appeared to be slightly worse than market expectations‚ with it share price falling 0.59% to R125.67‚ while the JSE’s general retailers index gained 0.48% on Monday morning.

The sales update ahead of its results scheduled for release on February 26 echoed Woolworths’s sales update last week‚ in showing decelerating sales growth following rising product inflation compared with 2015.

For the 52 weeks to December 27 2015‚ Massmart reported 8.4% sales growth and 3% product inflation.

“As a general remark on recent trends‚ there was a slight pick-up in South African sales growth but a continued decline in non-South African sales growth‚” Massmart said in its sales update.

The group is split into four divisions.

Fastest sales growth was reported by Masswarehouse‚ which houses Makro. It grew sales 11%‚ outpacing product inflation of 6.5%. Excluding new stores‚ Masswarehouse grew sales 7.6%.

The next fastest-growing division was Masscash‚ whose brands include Cambridge Food and Jumbo Cash. Its sales growth of 7.5%‚ however‚ was beaten by product inflation of 9.3%.

Massdiscounters‚ which houses Game and Dion Wired‚ grew sales 5.3% against product inflation of 4.8%. Excluding new stores‚ sales growth was 1.5%.

Massbuild grew sales 5.6% against production inflation of 4.7%. Comparable store growth was 1.7%.