Game and Makro owner says second booze ban caused R1.1bn loss in sales

Consumers stocking up on food items at a Makro Store in Johannesburg, South Africa. (Photo by Gallo Images/ER Lombard)
Consumers stocking up on food items at a Makro Store in Johannesburg, South Africa. (Photo by Gallo Images/ER Lombard)

Massmart has added its voice to retailers who lament the alcohol sales ban for causing them to part with billions of rands they could have made had the sale of liquor not been disrupted.

The owner of Makro and Game said the second instalment of liquor sales ban which ran from mid-July to mid-August caused it to lose approximately R1.1 billion when compared to the same period last year. The retail giant said when taking into account the impact of the full liquor sales ban, its third quarter sales decreased by 7.2%.

Massmart, which had already clocked a R1.2 billion loss at half-year mark in June, said its total estimated lost sales as a result of Covid-19 sales restrictions climbed to at least R5.7 billion by 27 September, when compared to the first nine months of 2019.

Apart from the setback caused by the return of full liquor sales ban in July, Massmart said the easing of trading restrictions slightly improved trading conditions when South Africa moved to Alert level 2 in mid-August and then level 1 in mid-September as the company saw an increase in foot traffic in most of its stores.

However, the group's total sales for the nine months ended on 27 September were still down 8.9% compared to the same period last year, reaching R60.5 billion. C comparable store sales – which do not include the impact of new stores – decreased by 8.8%.

Total sales from Massmart’s South African stores decreased by 9.4% or 8.8% on a comparable stores basis. The group's rest of Africa operations fared better, recording a 3.8% decline in total sales from and 5.0% on a comparable store basis.

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