COMPANY COMMENT
Massmart pummelled hardest in retail sector
The retail sector has been hit by the perfect storm, including everything from deflationary prices, to the VAT hike
If it’s true that Shoprite has been in the wars, what kind of intergalactic conflict has Massmart been involved in? The retail sector has been hit by the perfect storm, including everything from deflationary prices, to the VAT hike to the soft economy. But of all the retailers, the wars have been particularly hard on Massmart. Why? One way to measure the difference is to compare the share prices of the different retailers since the US giant Walmart said it wanted to buy a 51% stake in Massmart in 2010. Since then, Shoprite is up 117%, Woolworths is up 81% and Pick n Pay is up 54%. Massmart is down 20%. Three things count in Massmart’s favour against this measure: it comes off a high base, since its share price was boosted by Walmart’s bid; it was a well-run store, so the idea that Walmart would make a miraculous difference was probably overenthusiastic; and comparing Massmart to general retailers is somewhat unfair. Massmart’s big problem has been its durable goods sales. As the eco...
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