Source: Trade Tatler
A trading statement from Massmart last week resulted in a corresponding -20% drop in the share price.
Sales for the 52 weeks through December grew just +2.9%, or +1.2% on a like-store basis, with sales growth slowing in all divisions except Massdiscounters (Game and DionWired) over November and December, despite satisfactory Black Friday sales.
The problems are three-fold:
- Part of the problem is of course the state of our economy and its shaky 1% growth
- Neglect on the part of the new parent company has played a role: Walmart has had much bigger fish to fry in India, China and online than the African market
- Walmart’s requirements in terms of organisational structure, processes and product standards have shackled Massmart’s ability to operate lighter on its feet, making competing against the independents difficult – from the types of products on shelf through to the freedom to trade on the shop floor.