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Massmart bemoans reduced foot traffic and alcohol ban as sales decline

Massmart, the owner of brands including Game, Makro, Builder’s Warehouse on 21 January) provided an update on sales for the 52 weeks ended 27 December 2020, showing a 7.7% decline. It noted that trading for the fourth quarter of 2020 saw many of the previously imposed Covid-19 related trading restrictions lifted, which allowed trading to resume in most categories.

Liquor trading, however, continued to be impacted by limitations on trading hours as well as reinstated trading restrictions as announced by the government in mid-December, the group said.

The economic impact of the pandemic on consumer spending was evidenced by a general reduction in foot traffic, particularly in regional shopping malls, impacting sales in many merchandise categories during the fourth quarter.

“Specifically, and aligned to what was seen throughout the sector, sales over the traditional November 2020 Black Friday trading period were softer than those seen in 2019.”

The company said that the extension of Black Friday promotions throughout the month of November did mitigate the impact of softer Black Friday weekend sales to some extent.

Foot traffic and sales remained muted in December, albeit with stronger sales performance in home improvement and DIY categories, Massmart said.

Total fourth-quarter sales of R25.6 billion represented a decrease of 4.1% over the same period last year, with comparable-store sales decreasing by 3.6%.

This represented a slight improvement in the trajectory of H2 sales, which ended with a decrease of 5.9% over the same period last year, with comparable-store sales decreasing by 5.6%. For the 52 weeks, Massmart said that total sales amounted to R86.5 billion, representing a decrease of 7.7% over the same period last year, while comparable-store sales decreased by 7.5%. Sales in South African stores decreased by 7.9%, while sales from stores in the rest of Africa decreased by 5.4%.

As previously announced, Massmart estimated lost sales as a result of Covid-19 trading restrictions, to be around R5.7 billion. The group said it will provide further detail on its sales performance as part of the release of its annual results on 8 March 2021.

Source: Business Tech

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