UPDATE 1-Massmart shares hit 13-year low after loss warning

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JOHANNESBURG, July 30 (Reuters) - South African retailer Massmart said it expects to swing to a half-year operating loss, weighed down by softer than expected sales, margin weakness and higher expenses, sending its shares to a 13-year low.

Massmart, in which Walmart has a majority stake, is the latest retailer to confirm tough domestic conditions as increased value-added tax, unemployment and inflation coupled with higher fuel prices reduce consumer spending power.

Massmart generates 91.3 percent of group sales in South Africa. In May it had flagged flat operating profit before interest, depreciation, restructuring, non-trading items and taxation.

Compounding pressures on the group is the restructuring of its Massdiscounters and Masscash divisions, as well as deflation in prices of food and durable goods which have squeezed profitability as costs increase.

The owner of general merchandise and food wholesaler Makro said it expects to report an operating loss before non-trading items, foreign exchange movements and net interest of between 0 and 30 million rand ($2 million) for the six months through June.

That compares with operating profit before foreign exchange movements and interest for the previous corresponding period of 547.5 million rand.

Shares in Massmart dived as much as 27% to a level last seen in July 2006 and were trading down 16.9% by 1338 GMT.

"Reflecting the difficult consumer environment, margins were lower than anticipated across all divisions in May and June, which resulted in a disappointing group financial performance for the six months to June 2019," the company said.

($1 = 14.1842 rand) (Reporting by Nqobile Dludla Editing by Louise Heavens and David Holmes)