Political developments mar Massmart’s first-half performance

Massmart CEO Guy Hayward on Thursday said the company expected to report “disappointing” results for the first half of the year, as any green shoots in the economy – the drought ending, a stronger rand, potentially lower interest rates, and improvements in the Reserve Bank’s leading indicators – were “washed away” by the negative economic impact of political events in late March and April that culminated in the downgrade of South Africa’s sovereign debt. “The unfavourable impact on sales in discretionary product categories, such as general merchandise, has been notable and appears to be as strongly linked to weak consumer confidence as it is to underlying economic issues,” he said.