Walmart majority-owned retailer Massmart is selling its 14 general merchandise Game stores in West and East Africa as it evaluates its portfolio on the continent, the company’s CEO Mitch Slape said Friday.
Massmart, which owns Game, Makro, and hardware chain Builders Warehouse, forays into African markets – including Nigeria – have been marred by currency instability and constrained consumer demand, making it hard to operate profitably on a continent that was once regarded as a promising growth market for retailers.
Massmart has stated it will review its store portfolio outside of Southern Africa as part of a turnaround strategy. The review has now led to the closure of 14 stores across Ghana, Nigeria, Uganda, Kenya, and Tanzania.
According to Massmart, which has a presence in 12 African countries, game sales at stores in the rest of Africa declined 18.6% in rand terms and by 5% in constant currencies in the 26 weeks ended June, a drop caused by currency weakness.
Also, Game is being restructured with the goal of returning it to profitability. Although it reported a narrower trading loss of 347.3 million rand in the period, the distractions from the restructuring and constrained foot traffic in many malls and shopping centres contributed to an 8.7% sales decline.
Also, Massmart’s total headline loss narrowed by 40.8% to 645.4 million rand ($43.4 million) amid signs of its turnaround strategy continuing to pay off as it increased sales in the wake of COVID-19 restrictions.
Sales rose 4.4% to 41.3 billion rand, and trading profit increased to 444.2 million rand thanks to expense control, and Builders earned a healthy profit before interest and tax increases.