Massmart cautions on soft sales growth

Johannesburg -Massmart Holdings [JSE:MSM] said on Wednesday it expects lacklustre sales growth this year, as the unit of Walmart Stores battles with weak consumer demand.

Massmart, majority owned by the world's largest retailer, said comparable store sales increased by 5.6% for the first 21 weeks of its financial year.

"The decline in comparable sales growth has been evident in all product categories and across all South African geographies," the company said, adding it expected growth to "remain soft" for the remainder of the year.

Massmart also said operating margins would probably not match 2012 levels, reflecting recent capital expenditure.

The company said it expects to open 27 new stores in the remainder of the financial year, including Builders Warehouse stores in Botswana and Mozambique.

Shares of Massmart were down 0.8% at R202.50 at 09:14 GMT, compared with a 1% drop in the benchmark Top 40 - (Tradeable) [JSE:J200] index.