Massmart benefits from 53-week year

The retailer said growth across the group was 14.7%, with inflation of 7.5% across the group, implying real growth of 7.2%.

However, stripping out the extra week, sales grew 12.3% with same store growth of 10.9%.

Chris Gilmour, an analyst at Absa Asset Management Private Clients, said the growth was in line with what was expected by food retailers, which were less hard-hit by a tightening economic cycle than retailers of durable products such as appliances and apparel.

Nedcor Securities retail analyst Syd Vianello said Massmart's profits should be in line with expectations. He said the group had not grown space much during the year.

Massdiscounters, which houses Game and Dion Wired, grew sales 10.8% in the 53 weeks, with inflation of 2.7%. Sales in the comparable 52 weeks grew 7.8%.

Gilmour said sales seemed to be down on consumer resistance to spending disposable income on durable products.

Massdiscounters comprises Game stores in SA, Namibia, Botswana, Zambia, Uganda, Mozambique, Mauritius, Malawi, Tanzania, Nigeria, and Ghana as well as a few local Dion Wired stores.

Masswarehouse, which is represented by the 13 Makro stores, increased sales 17.4% with inflation of 7.2%. Comparable 52-week sales grew 15.2%. Sales of alcohol would have aided the good growth, said Gilmour.

Vianello said Game and Makro were in line with expectations. However, the building division was “way down” after a difficult second half, which was expected to continue into next year.

Massbuild, which has 67 do-it yourself, home improvement and builders' hardware outlets under the Builders Warehouse, Builders Express and Builders Trade Depot brands, increased sales 14.5%.

Inflation was 7.5% and sales without the 53rd week grew 12.5%. Sales were a bit disappointing at this unit, given the promise it had previously shown, said Gilmour.

Masscash's wholesale cash and carry outlets increased sales 18.8% with inflation of 13.3%. Without the extra week, sales grew 16.5%. Gilmour said the food division had been hit by higher inflation.

Vianello said the cash division had an “astonishingly” good second half.

Source: Business Day

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