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Cape Town - Massmart [JSE:MSM] on Tuesday said in a sales update that total sales for the 45 weeks to November 8 increased to R69.8bn. This is 8.7% higher than the previous corresponding 45-week period.
The company, which was recently ranked Africa's number two retailer after Shoprite in the Deloitte African Powers of Retailing report 2015, said comparable store sales rose by 7.0%.
Investors reacted positively to the news, sending the share price up 2.15% to R119.50 in early trade on the JSE. Massmart outperformed its peers Shoprite (+0.5%), The Spar Group (-1.02%), Pick n Pay (+0.62) and Woolworths (-1.09%).
The retailer however warned that the South African environment remains tough, with consumer confidence dented amid continued job losses and the rand falling to its weakest level ever.
The group also warned that food inflation was bound to increase amid SA's worst drought since 1982.
Massmart faces African economies affected by a double dip of lower commodity prices and a strong US dollar.
Despite the negatives, Massmart said long-term potential remains intact.
Massmart, the second largest distributor of consumer goods in Africa, estimated product inflation for the period at 3.1%.
The retailer said Massdiscounters increased total sales by 9.2% (4.3% comparable) with inflation of 1.6%.
Subsequent to June 2015, comparable sales growth in Game SA increased marginally, while comparable sales in Game Africa slowed slightly.
Masswarehouse increased total sales by 10.1% (10.1% comparable) with inflation of 3.5%, while Massbuild grew total sales by 11.8% (8.4% comparable) with inflation of 4.2%.
Masscash increased total sales by 6.0% (5.6% comparable) with inflation of 3.1%.
