JSE-listed retailer Massmart, in a trading statement, said total group sales for the 26-week period to June 26, amounted to R41.3-billion, broadly in line with the same period in 2021.

Sales from continuing operations, which excludes Cambridge, Rhino and Massfresh, amounted to R38.1-billion, which is an increase of 1.9% over the prior comparable period, with comparable store sales from continuing operations increasing by 4.3%.

Total sales relating to continuing operations in South Africa increased by 1.9%, with comparable stores sales increasing by 4.6%.

Further, total sales from continuing operations in the rest of Africa increased by 1.6% and by 1.3% on a comparable store basis.

"Pleasingly, comparable store sales growth from our continuing operations, the core store base in South Africa, which excludes the 15 Game stores subject to divestiture, amounted to 5.1%. Total internal sales inflation is estimated at 4.8% for the 26-week period," the company said.

Total South African store sales for the 26-week period, which continue to be impacted by stores damaged in the July 2021 civil unrest, remained flat while comparable store sales increased by 2.4%.

"Total sales, measured in rands, from our Rest of Africa stores for the 26-week period increased by 1.6%, with comparable store sales increasing by 1.3%. However, when measured in constant currency, total sales for our rest of Africa stores decreased by 2.6%, with comparable store sales decreasing by 2.9%," Massmart pointed out.

Total sales from discontinued operations of R2.9-billion were 19.7% lower than the same period last year, with like-for-like sales being 17.2% lower. Sales were directly impacted by the July 2021 civil unrest including stores that remain closed and product categories that were not re-introduced into stores that have reopened.

Liquor sales performed strongly, with like-on-like sales on a continuing operations basis increasing by 21.3% over the same period last year. This reflects sales recovery in its hospitality, restaurant and catering and wholesale customer base.

Meanwhile, food sales increased by 6.4% on a like-for-like basis over the same period last year, also supported by recovery in the hospitality, restaurant and catering sector. Total internal sales inflation relating to food is estimated at 6.8%, the company said.

"As reported, sales relating to general merchandise, our second-largest product category by value, have been softer as consumers prioritised non-durable goods spending in the context of rapidly increasing food, energy and transport cost inflation. Like-on-like general merchandise sales declined by 1.4% compared to the same period last year," Massmart highlighted.

While sales have recovered on a like-for-like basis compared to the same period last year, softer general merchandise sales have negatively impacted sales contribution in this margin accretive category. Margin pressure has further been negatively impacted by cost inflation outpacing sales inflation and lower margins in Builders resulting from increased trade sales associated with recovery in the construction sector, the company said.

"Our trading result has also been negatively impacted by two other material items. These are a one off negotiated lease exit settlement cost of R184-million relating to the Riverhorse Distribution Centre that was destroyed in the July civil unrest and increased finance costs attributable to a higher opening net debt balance compared to the prior year, also as a direct consequence of the impact of the July civil unrest. Pleasingly, our opening net debt balance gap has closed materially," Massmart said.

In addition, the group has received the second interim payment of R270-million relating to the business interruption insurance claim, stemming from the civil unrest in July 2021, bringing the total business interruption insurance recoveries received to date to R370-million.

"We continue to work with our insurers to conclude the claim and final payment before the end of the year," Massmart added.

The company will release financial results for the period on August 29.