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Results and private label

| Retailer trading results

As Massmart and SPAR Group announce results, for different time frames, Food Lover’s Market spotlights the widening of its agreement with Waitrose and Pick n Pay discusses how it is differentiating with its loyalty programme, we round up news from the country.

Massmart confirms sales rose 10.4% in FY2014

Massmart, in which US-based Walmart owns a majority stake, has confirmed that it enjoyed sales growth of 10.4% in its 2014 financial year, reaching ZAR78.2 billion (US$6.6 billion). The retailer said that the performance had been driven by comparable store sales growth of 7.5%, with the Massbuild – total sales up 14.6% – and Makro – total sales up 11.8% – outperforming.

The retailer said that sales at its Massdiscounters division, which includes general merchandise discounter Game, which has underperformed in recent quarters, saw sales rise 10.2%, with food sales underpinning growth. Massmart said that sales of food at Game rose 19% on a same-store basis and accounted for about 18% of total sales at the end of the financial year, a big step after food was only added in late 2008 to Game stores. Game’s fresh food offering, Foodcorp, has been rolled out to 66 stores.

Looking forward to the 2015 financial year, Massmart said that it remained ‘concerned by the relatively fragile South African consumer economy and we are cautious about the impact of lower oil prices on those larger African countries with some dependency on oil revenues’. As a result of the potential for slower sales growth in its home market, Massmart said that expansion in sub-Saharan Africa was a ‘priority’ and that it aimed to open 13 stores – which would increase store space by 45% – over the next two years. Massmart said that it would be looking to add stores in Kenya, Mozambique, Nigeria and Zambia.

SPAR (South Africa) updates on trading

In a trading update for the 17 week period to 24 January, SPAR Group has said that total sales rose by 38.3%, while excluding the impact of the acquisition of Ireland-based BWG Group total sales rose 8.7%. The retailer said that sales in its home market were driven by comparable store growth of 8.1% and aided by internal inflation of 5.9%.

Food Lover’s Market extends deal for Waitrose private label

Food Lover’s Market has announced that it will begin stocking a range of Waitrose’s private label products in its 120 stores after agreeing an import deal with the UK-based retailer. As part of the agreement, Food Lover’s Market will stock a range of Waitrose’s ambient and frozen products, including ready meals, tarts, cakes and ice-creams. Ambient products include specialist oils, sauces and salad dressings, as well as everyday items such as rice, pastas, condiments, coffees, teas, canned goods and a selection of spreads.

Commenting on the agreement, the chief executive of Food Lover’s Market’s parent company, Fruit & Veg City Holdings, Brian Coppin, said: “We are delighted that we will be offering a range of Waitrose products in our stores. We saw a synergy with the Waitrose brand as their core retail values of offering high quality food products and innovation in retail are so closely aligned to ours.”

Pick n Pay spotlights benefits of loyalty card programme

As the retailer predicts its loyalty card programme with break the 10 million mark by the end of 2015, the head of the Smart Shopper initiative, Steve Hoban, says that continuing innovation of the card’s benefits will help make it more attractive to customers. Hoban said that in the year ahead, the Smart Shopper programme would be aiming to provide a personalised coupon system and, through unique agreements with third-party partners, be able to offer shoppers free benefits from these companies as a reward for shopping with Pick n Pay.

Hoban said that shoppers were already taking advantage of the opportunity to switch Smart Shopper points for products or money off at from third parties, such as Ster-Kinekor cinema tickets or Galaxy Jewellers. As highlighted by Massmart’s outlook for 2015, any step that Pick n Pay can take to encourage loyalty and grow basket spend will help as the market is likely to see low levels of growth in the year ahead.

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