Robust times for Massmart

This is despite recent economic data showing flagging consumer demand in the face of high prices.

Massmart has already announced plans to open up to 25 new stores by 2011, according to its latest annual report.

CEO Grant Pattison said the group was experiencing robust performance, particularly from Masswarehouse and Masscash, which were benefiting from steady volumes in the food and liquor categories, while Massdiscounters —under which Game discount stores in SA and Africa operate — was benefiting from the weaker rand and a consumer shift to value-for money products.

“For the first 21 weeks of the 2009 financial year, Massmart's total sales growth was 13.3% and comparable sales growth was 12.3%, with 12-month rolling sales inflation running at 9.3%," Pattison said in an update issued soon after Massmart's annual general meeting yesterday.

“Within our portfolio we are experiencing a strong performance from Masswarehouse and Masscash benefiting from steady volumes in food and liquor categories,” he said.

“We are pleased with the performance of Massdiscounters, where the Game brand in SA has benefited from the consumer's shift to value and the African business continues to perform strongly and is benefiting from a weaker rand."

But building materials supplier Massbuild's sales and profits had been affected by the slowdown in the residential property sector.

This slowdown was due to high interest rates, low property prices and tighter credit lending requirements by banks as a result of the introduction of the National Credit Act.

Pattison said the group, whose total sales grew by 14.3% in the 53 weeks to June, had managed to perform well in the past 29 months since interest rates started rising as the Reserve Bank battled to contain high inflation.

Source: Business Day

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