* 20-weeks sales up 16 percent
* Shares up 0.6 percent
JOHANNESBURG Nov 21 South African retailer
Massmart expects no growth in margins until the end of
2013 as the unit of Wal-Mart Inc Stores forges ahead
with an aggressive cut-price strategy to double market share in
Massmart, 51 percent-owned by the world's biggest retailer,
said sales increased 16 percent in the 20 weeks to Nov. 11,
helped by new stores that added 3.3 percent to its trading
space. Same store sales were up 7.3 percent with price increases
averaging nearly 4 percent.
"While the level of sales is pleasing and gross margins
remain steady, the group's net margins are unlikely to expand
for the six months ending December 2012 or the year to December
2013," Grant Pattison, Massmart's chief executive officer, said.
The company's operating profit margin fell to 3.7 percent in
the year to end-June from 5 percent a year earlier.
Massmart, whose deal with Wal-Mart was completed last year,
is expanding its food retail business, challenging South
Africa's dominant grocers such as Shoprite, Pick n Pay
The company aims to take its food retail market share in
South Africa to as much as 20 percent over five years from 10
Shares in Massmart rose 0.6 percent to 178.01 rand, in line
with the JSE Top-40 index.