Thursday, 19 May 2022 16:50

Sales at Builders and Game fall, but Makro sales grow.

Business Reporter.

Massmart on Thursday (19 May) reported a marginal decline (0.2%) in group sales for the 19-week period ended 8 May 2022, amounting to R30.4 billion, while comparable-store sales increased by 2.3% over the same period.

Comparable stores sales excluded the impact of those stores opened or closed during the period, including those stores impacted by the unrest in KwaZulu-Natal, and parts of Gauteng in July 2021.

Sales from continued operations, which excludes Cambridge, Rhino and Massfresh, amounted to R27.9 billion, an increase of 1.4% over the prior-year period, with comparable store sales for continued operations increasing by 3.9%.

"The business has seen higher product and supply chain costs year-to-date; weighted average sales inflation across the business is approximately 3.6%, primarily in food and DIY categories.

In comparison to the same period in 2019 – which may be considered a reasonable basis for comparison as this period represents a base not impacted by Covid-19, as well as KwaZulu-Natal unrest – sales from continued operations in South Africa increased by 3.1%, Massmart said.

For Makro, total sales for the 19 weeks increased by 6.7% over the same prior-year period, with comparable stores sales increasing by 9.7%.

Massmart said that while food and liquor sales have performed well, sales relating to general merchandise, specifically in Makro, declined on the prior-year period as cash strapped consumers focused their spending more toward non-durable items.

"Compared to the same period in 2019, sales in Makro increased by 6%, indicative of the impact the pandemic had on our Makro customers."

In Builders, total sales decreased by 3.9% over the prior year on the back of an exceptionally strong base in 2021, with comparable stores sales decreasing by 3.4%.

"However, Builders sales outpaced industry-wide sales reported in the hardware, paint and glass sector as measured by the latest Stats SA data release, suggesting that Builders is gaining market share," it said.

Trade sales continue to be challenged by the slow recovery of the commercial construction industry, whilst general home improvement market growth is slowing compared to the exceptionally strong Covid-19 induced growth of the last 24-month period, said Massmart. Compared to the same period in 2019, total sales in Builders grew by 5.9%.

Game was impacted by softer general merchandise sales, as the pressure on disposable income resulted in consumers shifting their spending in favour of non-discretionary items, the group said.

Total sales decreased by 3.7%, with comparable stores sales coming in 0.9% lower on the same period last year. Total sales in Game’s stores in South Africa declined by 1.8%, with comparable stores sales increasing by 2.0%.

"Encouragingly, we are seeing consistently positive sales performance trends, both as a result of increased customer traffic, larger basket sizes and the positive impact of our store relay and light remodel programme," Massmart said.