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