The South African food and goods retailer Massmart Holdings Ltd, majority-owned by Wal-Mart Stores Inc., cautioned of difficulties next year, as consumer spending was hurt by higher interest rates and prices.
Missmart Holdings reported a 26% decline in its profit over the first half ended June 29th. According to Missmarts statement, its profit over the period fell to 364 million rand ($34.3 million), while the profit at constant exchange rates declined by 5.7%. Sales, however, increased by 10% and reached 35.7 billion rand ($3.36 billion).
“In wholesale, it was very tough going, obviously reflecting the lower-income group that was struggling,” Guy Hayward, CEO of Massmart, said: “We were also feeling the effect of the mining strike, which we believe probably has a bigger effect on the economy than is fully appreciated.”
Retailers in South Africa are facing some headwinds due to high rates of unemployment and inflation that make customers avoid major purchases. Missmart cautiong that that these factors “seem likely to persist for 2014 and possibly 2015”.
Wal-Mart Stores Inc. has been recently focused on attracting more online customers in China. Yihaodian, the Chinese online retailer in which Wal-Mart holds a 54% stake, has recently increased the number of product offerings on its website, as global markets prepare for the IPO of Alibaba, widely projected to be largest IPO ever.
Alibaba, the Chinese online-retailer Alibaba, is valued at ~$200bn-$300bn and is set rock the global online retailing sector.
Wal-Mart Stores Inc. was 0.07% up to close at $75.90 per share yesterday, marking a one-year change of +4.86%. The company is valued at $244.67 billion. According to CNN Money, the 22 analysts offering 12-month price forecasts for Wal-Mart Stores Inc. have a median target of $80.00, with a high estimate of $90.00 and a low estimate of $69.00. The median estimate represents a +5.40% increase from the last price of $75.90.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
