Big increase in online sales for Makro and Game

Massmart has released its interim results for the 26 weeks ended 28 June 2020, which showed a big decline in revenue and profit.

Massmart’s total sales of R39.6 billion for the period represents a decline of 9.7% compared to the same period in 2019.

The company said sales were significantly impacted by restrictions put in place in response to the COVID-19 pandemic.

A trading loss of R266.6 million was reported for the period, down from a trading profit of R318.9 million over the same period last year.

In a presentation to analysts, Massmart CFO Mohammed Abdool-Samad said lockdown restrictions impacted around 56% of categories which lost them R4.6 billion in sales.

In April and May 2020, Massmart generated R10.747 billion in sales, down from R15.322 billion in April and May 2019.

Massmart said it expects the uncertain operating environment and negatively impacted economy related to the COVID-19 pandemic to persist.

“While trade in all our categories is currently permitted, future COVID-19 related trading restrictions remain uncertain,” it said.

“We are, however, confident that we will be able to navigate through this, as we successfully did during the first half of this year.”

The chart below shows Massmart’s loss in sales during the strict COVID-19 lockdown in April and May.

Big increase in online sales

While Massmart’s financial performance took a big knock during the second quarter this year, online sales showed exceptional growth.

Online sales across the group increased by 95% while click-and-collect increased by 85.7% and online traffic increased by 35.3%.

Breaking it down by store gives a good view of exactly how strong the online sales growth was.

  • Game’s online sales grew by 100%
  • Builders grew its online sales by 160%
  • Makro grew online sales by 84%

What is particularly encouraging for Massmart is that, despite this growth, online sales still only accounts for 2.1% of total sales.

This means there is a lot of potential for the retailer to grow online sales and capture a larger share of the ecommerce market in South Africa.

Now read: Same-day delivery from Makro launched

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Big increase in online sales for Makro and Game