South African retailer, Massmart revealed its sales update yesterday, with shares falling as much as 2.5% much to the dissapointment of the market analysts.

The Walmart-controlled retailer slumped to its lowest level in almost a month as sales for the 44-week period to April 29 rose 14.7% to R51.7bn ($6.4 billion) from the previous period, said the company, which is 51% owned by the US retailing giant.

Comparable store sales grew 8.9%, while inflation for the period is estimated at 1.4%.

Massmart’s stock fell for a second day, ending the day 2% lower at R164.20, its lowest since April 10. The performance was in line with an overall weaker JSE, which was down 1.2% amid global economic concerns.

For the 26 weeks to December 25, Massmart reported sales growth of 15%,  while rival retailer Shoprite recorded 13.2% growth in the same period.

Walmart’s bid for a controlling stake in Massmart was inspired by the retailer’s hopes of using SA as a stepping stone into the rest of Africa, countering slow growth in the US. In its domestic market, Walmart reported a revenue rise of 1.5% in the year to January.

Yesterday, Massmart announced board changes as part of its expansion strategy in Africa.

CEO Grant Pattison will have the task of focusing on local and African growth priorities, including the implementation of the company’s retail food strategy.

Source: Businessday