Massmart’s nine months turn over shyly rise by 0.2% supported by positive performance in Makro

SOUTH AFRICA – Consumer goods distributor Massmart, has reported a 0.2% marginal rise in total sales in the 39-week period ended 26 September 2021, amounting to R60.6 billion (US$3.94 billion).

Sales from continuing operations for the 39-week period amounted to R55.5 billion (US$3.61 billion) and represented an increase of 2.5% over the prior year.

According to the Walmart-owned South African retailer, Massmart, sales were subdued by the softer consumer environment, exacerbated by the negative effects of the social unrest.

In addition, the retailer continued to feel the negative effects on liquor trading restrictions that resulted in 110 days of lost trade and that particularly undermined retail liquor sales which normally contribute 15 % of its overall merchandise mix.

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The company’s Makro banner attained total sales of R19.9 billion (US$1.3 billion), increasing by 10.8% over the prior year, despite food sales being under pressure as a result of ongoing lower activity in the corporate, hospitality, restaurant and catering industry.

Liquor sales for the 9-month period increased by 48.1%, with general merchandise sales increasing by 9.5%.

Sales in its Cash & Carry wholesale business amounted to R13.7 billion (US$891m), and was 5.0% lower than the same period last year, with comparable stores sales declining by 1.4%.

However, its Game retail chain continues to struggle, with the brand seeing sales decrease by 8.2% to R10.9 billion (US$709.4m) in the period.

Massmart said lower foot traffic at the country’s malls coupled with the major damage seen during the July unrest have contributed to the brand’s lack of performance.

Meanwhile, total sales in Cambridge of R4.7 billion (US$305.9m) were 20.1% lower than the same period in last year, and down 11.9% on a comparable stores’ basis.

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Sales trends indicate that customers in this segment of the market are mostly impacted by the pressures of increased unemployment and lower disposable income.

Cambridge was also significantly impacted by the damages caused from the civil unrest, with 18 stores directly impacted, most of them severely.

The group noted that it is likely to suffer losses of R650 million (US$42.3m), because its cover with the South African Special Risks Insurance Association (Sasria) does not cover the full extent of its losses.

However, Massmart expects to redeem itself in the upcoming Black Friday and Festive trading periods.

Massmart has undertaken changes in its leadership position following the resignation of Doug Jones, Senior Vice President and CEO: Massmart Wholesale, who has made the decision to take up a job opportunity in Sydney, Australia.

The leadership of Massmart Wholesale will be handed over to Llewellyn Walters, a seasoned retailer who successfully integrated and settled the various banners that currently comprise the very successful Builders trading banner, when he joined the Massmart Executive Committee in 2008.

The Game and Builders CEO’s, who previously reported to Llewellyn in his retail role, will now report directly to Mitch Slape, the Massmart Group CEO.

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