The share price of listed general merchandise, food and alcohol retailer and wholesaler Massmart rose by 1,7% or 75 cents in early trade on Tuesday, supported by its favourable trading statement released late on Monday in an otherwise mixed market for retail stocks.
By 10.25am, Massmart shares were trading on the JSE Securities Exchange (JSE) at R43,75, up from R43 at Monday’s close, with 34 281 shares having changed hands in 21 trades. By comparison, the FTSE-JSE General Retail Index (J052) was up only 18 points or 0,1% over the morning.
Late on Monday, Massmart reported that its sales had grown by 13,8% to R13,9-billion for the 26 weeks to December 26 2004, with sales before acquisitions rising by 11,4% and comparable store sales rising by 8,2%, compared with the year-earlier period.
As the third-largest distributor of consumer goods in Southern Africa, the leader in general merchandise and liquor and the fourth-largest in food, the group owns such brands as Dion, Makro, Game, Jumbo Wholesale Cash & Carry, voluntary buying organisations Shield and Furnex, and more recently Tile Warehouse and Builders Warehouse.
The result is a strong one for the company given the deflationary environment over the six months, in which it experienced overall sales deflation of 1,9%. The deflation was led by general merchandise prices, which fell 5,6%, but this was offset by strong consumer demand for general merchandise at the group’s Dion, Game and Makro stores.
Massmart’s wholesale food operations, including Jumbo, fared less well due to their focus on lower-income consumers, who have benefited less from the current economic upturn in South Africa than the higher-income market segment.
Food inflation over the six months was only 0,5%, the company said, while liquor inflation was 7,9%.
Massmart plans to announce its interim results to December 2004 on February 24. — I-Net Bridge