Yes, we know, we covered the Massmart results a few weeks ago. But with Massmart being the most diversified of South Africa’s major retailers, a closer look is perhaps instructive for other businesses struggling under the current economic climate. Massdiscounters, of course, was a wash, with sales down -1.2% to R19.7bn and trading profit 91%, to R32.6m, on the back of the yet-to-be-proven move of head office to Joburg. Massbuild, generally a reliable source of both sales and profits, saw its bottom line flatten under depressed consumer demand. Masswarehouse – that’s Makro and Fruitspot to most – grew sales +5.4% to R28.8bn, but trading profit fell -12.4% to R1.1bn, in the face of high costs growth of +9.2%, and stock control challenges off the back of the strong move to fresh produce, with unexpected additional stock losses for which 20 people including managers were given their marching orders. Some good news from Masscash (Rhino, Jumbo and Cambridge), where comparable sales grew +2.1% to R28.7bn, and comparable trading profit +48.4% to R188.6m, on good expense management and what we trust is the beginning of the ship turning for the division that competes most strongly with the powerful independent wholesale and retail trade.
Comment: At a time like this, control of expenses through efficiencies is (almost) everything.