Massmart sales wrecked by riots and alcohol bans
Makro and Game owner Massmart has reported that its general merchandise sales, its second-largest sales category, was 9.7% lower in the fourth quarter of 2021 compared to the same period in 2020.
“Sales were impacted by various factors, including Covid-19 liquor trading restrictions, lost sales from 43 stores damaged during the July unrest in Gauteng and KwaZulu-Natal, unrest related supply chain disruptions and the impact of global supply shortages,” Massmart said in a sales update on Friday.
These local and global supply chain shortages, coupled with the two Makro stores impacted by the riots in KwaZulu-Natal, resulted in its decline in general merchandise sales.
Total group sales for the 52 weeks ended 26 December 2021 amounted to R84.9 billion, which was 1.9% lower than the same period in 2020.
Comparable store sales were 1.7% higher than in the same period in 2020.
Comparable store sales account for stores opened or closed during the period and adjusted for the impact of stores damaged through the civil unrest.
Makro — 6.6% increase
“At Makro, total sales of R29.0 billion for the 52-week period were 6.6% higher than in 2020, whilst comparable sales were 10.6% higher,” Massmart reported.
“Liquor sales performed especially strongly, with comparable sales growth of 39.8% compared to the same period in 2020, whilst comparable sales of general merchandise increased by 7.2% over the same period in 2020.”
Massmart said that business activity in the hospitality and catering sector remains lower than usual.
“This industry was impacted by various levels of trading restrictions as well as international travel restrictions during the year,” it noted.
Game — 8.1% decrease
At Game, total sales of R15.3 billion for the 52 weeks were 8.1% lower than the same period in 2020. Comparable sales were 5.6% lower than in 2020.
Total South African store sales at Game were 6.9% lower, while comparable South African store sales were 3.7% lower.
“The Game supply chain was particularly susceptible to unrest related supply chain disruption that resulted in insufficient in-stocks of some core appliances and home electronics in the period following the unrest,” Massmart stated.
This was exacerbated by lower in-stock levels on key lines of certain electronics and appliance products due to global supply shortages.
Wholesale Cash & Carry and Builders
Sales in Massmart’s Wholesale Cash & Carry business of R19.1 billion for the 52 week period were 6.3% lower than the same period in 2020. Comparable sales were 1.6% lower.
Massmart said this was primarily the result of lower sales to the Hospitality, Restaurant and Catering sector, which continues to be significantly impacted by the negative consequences of the Covid–19 pandemic.
Builders total sales of R14.9 billion for the 52 weeks were 7.1% higher than the same period in 2020. Comparable sales increased by 5.2%.
“Retail sales continue to perform at similar strong levels as seen throughout the year,” said Massmart.
“Trade sales to contractors have remained subdued, due to slow re-commencement of Covid–19 impacted large commercial construction projects and infrastructure development by Government, both of which remain at low levels.”
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