Walmart-owned retailer Massmart, whose brands include Makro and Game, warned on Thursday it had swung into a loss in its year to end-December, as SA’s consumers cut back on higher-margin durable goods such as kitchenware and electronics.
In addition to trading disruptions caused by “aggressive” load-shedding in early December, consumers continued to prioritise spending on non-durables, such as food, the company said. During its second half, general merchandise sales — the group’s biggest and highest-margin category — fell 2.6%.
The JSE’s general retail index was the worst-performing index in 2019, falling 21.88%, with Massmart’s share price halving.
Retailers have reported that consumers are cutting back on spending amid slow wage growth, rising fuel costs and a VAT hike.