News analysis: Further evidence of SA's retail slowdown

Massmart’s long-suffering shareholders have been on the receiving end of disappointment for nearly a decade. The trend seems set to continue. The retailer showed a sliver of hope in its past year to December when it turned in a 15.8% rise in headline EPS (HEPS), its best showing since becoming a 51%-owned subsidiary of Walmart in June 2011. It proved short-lived, however. Massmart’s performance went back into a nosedive in the 26 weeks to June 25, with sales in its SA operations limping in a mere 1.7% up with the help of internal product inflation of 3.2%. On a like-for-like store basis, sales volumes were down 3%. Faring even worse, sales recorded by non-SA operations (which normally account for about 9% of group sales) slumped 11.9%. The big damage, notes Massmart, was caused by weakness of domestic currencies against the rand. Overall, it left Massmart’s half-year sales up a token 0.5% at R42.5bn. "They are disastrous results," says Alec Abraham of Sasfin Securities.Nadim Mohamed...

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