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...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now