South African retailer Massmart Holdings said its growth remained “steady” in the 20 weeks to 11 November but warned on margins for the second half.
Notwithstanding “political uncertainty, both nationally and globally”, South African consumer spending has been “relatively stable”, Massmart said as it recorded total sales growth of 16.2% in the period. Comparable-store sales grew 7.3%.
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“Overall, sales growth in both food and home improvement has been strong, while we have seen some weakness in general merchandise sales growth, particularly in the last few weeks,” the retailer said.
It added: “While the level of sales is pleasing and gross margins remain steady, the group’s net margins are unlikely to expand for the six months ending December 2012 or the year to December 2013 as a consequence of cost pressures arising from our investments in growth, high service-cost inflation and the investment in food retail.”
Massmart opened six stores since July, a 3.3% increase in trading space. These included two Makro stores, three Game stores and one Rhino outlet.
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