Mass ac­tion

Finweek English Edition - - COMPANIES & MARKETS -

THE SUB­JECT of a takeover of Mass­mart Hold­ings by United States multi­na­tional Wal­mart Stores, the gi­ant South African re­tailer re­cently punched up with a strong sales update, rais­ing hopes for a turn­around of the group’s tough 2010 fi­nan­cial year. For the 26-week trad­ing pe­riod to De­cem­ber 2010, Mass­mart posted a 13,3% rise in group sales to R27,5bn, with year to date de­fla­tion es­ti­mated at 2,9%. Com­pa­ra­ble store sales were 7,3% up.

It may be pre­ma­ture to pre­dict the group’s 2011 first-half earn­ings but an­a­lysts reckon the sales update sug­gests a solid re­bound. Gen­eral re­tail­ers – the do­main in which Mass­mart largely trades – were among the hard­est hit by the re­ces­sion be­cause the prod­ucts they sell are gen­er­ally con­sid­ered dis­cre­tionary.

By di­vi­sions, Mass­dis­coun­ters – which houses Game and Dion Wired – lifted sales by 14,4% (com­pa­ra­ble: 9%), with de­fla­tion of 8,2%. Mass­ware­house – hous­ing Makro – grew by 10,7% (com­pa­ra­ble: 7,8%), with de­fla­tion at

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