Massmart to open 13 new stores in 2016 despite tough conditions | Fin24
 
  • Data Market Inquiry

    MTN says it is prepared to defend itself before Competition Tribunal over report.

  • Claims of sabotage

    What we know so far about allegations of sabotage at an Eskom power station.

  • Dudu Myeni

    Court dismisses former SAA chiar's bid to have Outa withdraw from delinquency case.

Loading...

Massmart to open 13 new stores in 2016 despite tough conditions

May 26 2016 10:41
Matthew le Cordeur

A Massmart warehouse.

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 49
Change -1
% Change -2
Cumulative volume 677627
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

INFOGRAPHIC: How renewable friendly are SA’s top 5 retailers?

Tough year ahead for SA retailers as Massmart stalls

Retailers report exciting results off good festive season trade

Massmart sales shoot up by 9%

Investors cheer Massmart trade update

Massmart sees lower profit, shares slump 10%

 

Cape Town – Massmart said it will open 13 stores in 2016, despite tough economic trading conditions caused by high inflation and low economic growth in South Africa.

Massmart [JSE:MSM] CEO Guy Hayward told investors on Thursday that the new stores are in addition to the seven stores they have opened since 2015, “most reporting very strong sales”.

“We estimate that our stores opened in South Africa since January 2015 have contributed 1 300 permanent and 5 000 temporary or indirect jobs.”

For the first 21 weeks of the 2016 financial year, Massmart's total sales growth was 9% and sales growth 6.7%, with year-to-date sales inflation of 5.4%.

“Despite the challenging trading conditions in our non-food areas, our strong food sales, good margin management and effective expense control should assist in delivering a satisfactory performance for the six months to June 2016.”

Food inflation at record high

Referring to last week's SA Reserve Bank Monetary Policy Committee meeting, where the repo rate was kept unchanged at 7%, Hayward noted that the short- and medium-term outlook for the SA economy remains muted, uncertain and likely volatile.

“Reported CPI for April 2016 included a food inflation component of 11.3%, which is a five-year high,” he said. “This corroborates with our expectations of drought-induced food inflation accelerating, likely only abating in the fourth quarter of this year or the first quarter of 2017. 

“Price inflation for imported durable product is now expected to rise, as retailers and suppliers have sold out of product originally purchased or hedged prior to the December 2015 currency weakness,” he said.

“The South African consumer economy is in a classic defensive cycle with rising inflation, including food, leading to higher interest rates which, in turn, both constrain consumers' discretionary spending.”  

massmart  |  inflation  |  retail  |  drought
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote

Loading...