Massmart swings to annual headline loss; no dividend
Massmart swung to an annual headline loss of R1.1-billion, as financially constrained customers chose to spend more on food instead of discretionary items such as appliances, the South African retailer said on Thursday.
The headline loss for the 52 weeks ended December 29, compared with headline earnings of R900-million in 2018, Massmart, majority owned by Walmart, said in a statement.
The retailer and wholesaler did not declare a final dividend.
Consumers are battling with high levels of unemployment, a modest increase in negotiated wages and higher average fuel and utility prices, which have constrained spending in South Africa.
Sales growth continued to be under pressure, especially over the course of the second half of 2019, the retailer said, with the pressure most evident in general merchandise, its biggest category by value and contribution to margin.
The South African retailer said it delivered a very strong sales performance for Black Friday at the end of November, but it did not carry-over into the December holidays.
Massmart's total sales rose 3% to R93.7-billion, with comparable sales growth of just 1.5%. Food and liquor sales jumped by 5.1%, while general merchandise sales fell 1.3%.
High margin home improvement sales increased 3.4%.
"The sales performance across our major categories is reflective of the spending pattern of a financially constrained consumer who continues to prioritise spending on non-durables over durable goods," the retailer said.
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