Cape Town - Massmart, majority owned by WalMart, reported robust growth despite a
tough environment last year.
The group announced on Thursday that, against the
backdrop of very low discretionary consumer spending, its full-year results
showed a total sales increase of 7.7 percent to R91.3 billion.
Comparable sales, which strips out additional stores, increased
by 5.4 percent, with product inflation estimated at 6.7 percent.
The results were underpinned by good margin management
and excellent cost control, it says, which resulted in headline earnings
increasing by 15.6 percent to R1.3 billion.
Sales performances across the group's major product
categories reflected the economic pressures within the South African consumer
environment.
Total food and liquor sales grew at 11.7 percent for the
year, while general merchandise, which continues to be impacted by very low
discretionary consumer spending, grew by 1.5 percent.
CEO Guy Hayward, Massmart says the group had a particular
focus on operating profit in recent years.
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"I am pleased that operating profit continues to
improve, this year saw an increase of 15.5 percent. This is noteworthy given
the group's exposure to General Merchandise, which has been significantly
impacted by low levels of discretionary consumer spending. These results also
reflect our emphasis on enhancing business efficiencies, which we will continue
in 2017 as we maintain our focus on leveraging of group transport, logistics
and supply chain."
Haywood said the group is excited by the growth of its
online offering, which doubled sales last year and is set to continue to grow
this year with the launch of Builders online.
"We are hopeful that several key economic drivers in
South Africa will improve in 2017, lower food price inflation, some rand
strength and possibly lower interest rates. This makes us cautiously optimistic
for the upcoming period. However, this optimism remains measured by the high
levels of uncertainty and volatility that currently prevail.
“As a result we will continue to focus on factors within
our control and our strategic priorities remain unchanged: we are beginning to
see pleasing results from our continued focus on new retail formats, including
the growth of our online offering and African footprint, as well as the rollout
of new retail food and Builders in South Africa."
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