In an environment dominated by rising food and fuel prices and higher interest rates, retailer Massmart on Thursday announced what it termed "strong" overall results for the year ending June.

"Given the current economic environment we are cautious about the year ahead, but are confident in our business model and the South African consumer economy," Massmart CEO Grant Pattison said in a statement.

The group's four high-volume, low-cost, low-margin distribution divisions showed a balanced performance. Masswarehouse and Masscash produced strong profit growth whilst Massdiscounters and Massbuild grew profits near their rate of sales growth.

"However, the general tightening in consumer spending was evident in slightly lower real group sales growth, a greater response to demonstrable value in promotions and entry-price point brands, and a shift in the method of payment with declining credit card usage," Massmart said.

For the 53 weeks to 29 June total sales increased by 14.3 percent and total sales for the 52-week period increased by 12.1 percent.

Sales inflation was 7.5 percent.

Comparable-store sales for the 52-week period rose by 10.8 percent.

Gross profit was at 18.36 percent, just above the prior year's 18.31 percent.

BEE transaction

Headline earnings before Massmart's BEE transaction grew by 22.9 percent while headline earnings per share before Massmart's BEE transaction grew by 23.8 percent.

A final cash dividend of 163 cents per share, representing a 1.7 times dividend cover, was declared.

Total expenses increased by only 10.8 percent and improved as a percentage of sales over the prior year.

Massmart is Africa's third largest distributor of consumer goods.

Sapa