52 Week sales update from Massmart

Massmart released a 52 week sales update yesterday, and I guess Mr. Market was marginally pleased with it. It looked better than I had anticipated, that is an upside surprise! Firstly the 52 week cycle that retailers have do not coincide with normal year ends (for other companies), because a month does not end on a Sunday all the time, the end of a retailers trading week. This particular 52 week sales period is to 24 June 2012. Really Sunday the 1st of July, that is so inconsiderate of you. But in a way this is a good thing, because that means that next year could possibly have a week longer and that is good for sales.


There are four divisions over at Massmart, Massdiscounters, which includes DionWired and Game stores, Makro (Masswarehouse), which is self explanatory, Massbuild, which consists of the "Builder's" brands, the Warehouse, Express and Depot, all of which I am sure that you know well. The ones that perhaps you do not know as well, is the last division, Masscash which consists of CBW, Jumbo Cash & Carry and Shield. And more recently the addition and roll out of Cambridge Foods, Byron visited one of these on a Massmart site tour not so long ago. The major difference between say for instance Game Foodco (the new retail offering) and Cambridge Foods is offering to different LSM groups, with Cambridge servicing 2-6 whilst Game Foodco's will service 5-10. For a simple explanation, I found one on the web, here goes, The 4 Lifestyle Levels. Which one are you?


Into the sales numbers, which are broken down by each division, straight from the release:

* Massdiscounters increased by 11.0% (4.4% comparable) with deflation of 3.3%;

* Makro increased by 20.1% (11.6%) with inflation of 1.9%;

* Massbuild increased by 13.0% (9.3%) with inflation of 1.4%; and

* Masscash increased by 16.5% (11.6%) with inflation of 6.1%. Total sales growth has been boosted by the inclusion of Rhino from 1 March 2012.

Total group sales for the period reached a record 61.2 billion Rand, showing an increase on last year of 15.5 percent. In terms of who is the most important division across the group, the Masscash division represents the most important part of the business currently, taking these increases into account, that division should roughly be 37.4 percent of overall group sales. Makro makes up roughly 25 percent of the group sales, whilst Massdiscounters represents around 24.2 percent of total sales. Whilst Massbuild sales are the smallest division (13.4 percent), they still manage to clock nearly 8.25 billion Rands worth of sales. That Builders Warehouse, you can never walk out with just one thing! Results are expected on the 22nd of August, we will as always be watching.