SOUTH AFRICA – Walmart-owned South African retailer, Massmart expects its headline loss in the half year period ended June 2022 to increase by at least 51% to a possible loss of R974 million (US$58.1m), from R645 million (US$38.5m) in the previous period.
The total group sales according to its trading update, amounted to R41.3 billion (US$2.47 billion), being broadly in line with the same period last year.
Stores sales in South Africa increased by 2.4% while total sales, measured in Rands, from our Rest of Africa stores increased by 1.6%, with comparable store sales increasing by 1.3%.
Pleasingly, Liquor sales performed strongly, with like-on-like sales on a continuing operations basis increasing by 21.3% over the same period last year.
This reflects sales recovery in its Hospitality, Restaurant and Catering (HORECA) and wholesale customer base.
Meanwhile, food sales increased by 6.4% on a like-for-like basis over the same period last year, also supported by recovery in the HORECA sector
Sales relating to General Merchandise, Massmart’s second largest product category by value, have been softer as consumers prioritised non-durable goods spending in the context of rapidly increasing food, energy and transport cost inflation. Like-on-like General Merchandise sales declined by 1.4% compared to the same period last year.
Overall sales from continuing operations, which excludes Cambridge, Rhino and Massfresh, amounted to R38.1 billion (US$2.27 billion), an increase of 1.9% over the prior year period, with comparable store sales from continuing operations increasing by 4.3%.
Total sales relating to continuing operations in South Africa increased by 1.9%, with comparable stores sales increasing by 4.6%.
On the other hand, total sales from continuing operations in the Rest of Africa increased by 1.6% and by 1.3% on a comparable store basis.
The sales process of the Rhino, Cambridge and Massfresh businesses continues, as such, the results of both stores are treated as discontinued operations.
Recently, the Competition Commission recommended that Massmart’s sale of Cambridge Food, Rhino and Massfresh to Shoprite for R1.36 billion (US$81m) be approved.
To this end, total sales from discontinued operations of R2.9 billion (US$173m) were 19.7% lower than the same period last year, with like-on-like sales being 17.2% lower.
Sales were directly impacted by the July civil unrest including stores that remain closed and product categories that were not re-introduced into stores that have re-opened.