Lockdown puts pressure on Massmart’s sales

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Lockdown puts pressure on Massmart’s sales

Published Date: 2020-05-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Lockdown puts pressure on Massmart’s sales

The retailer and wholesaler was unable to sell items that contributed more than half of its sales last year.

Massmart says it was unable to sell a significant number of the products it stocks on its shelves for most of last month due to lockdown restrictions. However, the retailer and wholesale says proactive engagement with the Department of Trade and Industry meant it could include some additional items from the middle of the month when amended regulations came into effect.

In a trading update, Massmart said restrictions on the sale of general merchandise, liquor and home improvements meant a big drop in April's sales. Together, these categories contributed 56% of last year's total sales. By excluding them, it said sales for the 19 weeks to 10 May were down 11.9% from the same period last year, with comparable store sales falling 12.1%. Sales from its SA stories amounted to R25.3 billion, down 13%, while total sales from its stores outside SA rose 1.3% to R2.9 billion.

It said it continued to focus on prudent cash flow management and initiatives to improve cash generation. These included rental negotiations and improved, mutually beneficial terms with strategic suppliers. It had met all payment obligations throughout the lockdown and continued to pay all employees in full.

The group said the factors affecting its financial performance remained fluid, making it difficult to forecast its short-term performance.

Its shares rose 2.6% to R22.54 yesterday.





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