Massmart, which is owned by US retail giant Walmart and runs the Game, Makro and Dion Wired chains, saw its share price drop 21% on Tuesday, to close at R90.65, after reporting flat sales for the festive season. The decline in the general goods retailer’s share price followed a similar fall in the share prices of clothing retailers Mr Price and Woolworths in the past week, when they also reported disappointing sales for the weeks leading up to Christmas.

South African retailers have had to deal with difficult trading conditions over the past few months. A rise in the VAT rate, higher fuel prices and below-inflation pay increases have put South African consumers under severe economic strain. Higher levels of indebtedness and a recent increase in interest rates have also put consumers under pressure. Though the past year was a particularly difficult one for consumers, Sasfin Bank senior equity analyst Alec Abraham pointed out that they had been under pressure for far longer. “Co...

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