Game to pull out of East, West Africa

The move is the retailer’s latest attempt to stem losses brought on by the Game stable, which has consistently posted flat results, pushing its management to commence divestment of its East and West Africa Game Stores and 15 in South Africa.

It may effectively mean around 14 stores are affected, and may bring its Game network down to 124, considering the additional eight stores Massmart announced it will close down in South Africa last month.

Five years ago, it had 142 stores.

Over time, the Game’s store network has shrunk, with its performance largely weighing on the group’s overall performance.

Since taking a majority stake in Massmart in 2011, United States retail giant Walmart has not been able to witness favourable returns, with Massmart struggling in the market and lagging behind some of its peers.

The result of Walmart’s struggles in the country led to its buyout offer of more than N$6 billion, which the company said will help it continue its turnaround strategy.

In the past five years, Massmart’s overall store network has fallen to 403 from 423, excluding the impact of eight South African store closures and the closure of its East and West African stores.

The store network decline is mirrored by the decline in group sales, which sat at N$93,7 billion in 2017, relative to N$41,3 billion in 2022.

Its Game Stores sales in South Africa have also fallen from N$15 billion to N$7,4 billion.

The retailer’s Massdiscounters unit, which in 2017 was still primarily made up of Game Stores, included DionWired, its hi-tech retailer that met its demise in 2020 when Massmart moved to shutter all its stores in the country.

It bled losses of over N$674 million at the time of its closure.

The division traded in 12 geographical locations: South Africa, Botswana, Ghana, Mozambique, Nigeria, Uganda, Kenya, Lesotho, Malawi, Namibia, Tanzania and Zambia.

It had a network of 199 stores in South Africa and 22 in the rest of Africa.

The addition of fresh foods in the Game stable was high on the retailer’s plan and had been rolled out in 72 stores in the domestic market and 17 in other African countries, a move that was also short-lived.

Although the retailer contended with low consumer confidence in 2017, Game’s market share in the durables category still saw some green shoots, with stores still managing to generate total sales of N$15 billion, albeit dropping by 1,9%.

Game continued to emerge as an underperformer and at one point, then chief executive officer Guy Hayward conceded the company’s performance was disappointing when profits in the Massdiscounters unit plunged 91% to N$32,6 million from N$373,5 million during the company’s 2018 financial year. It had added just five stores in the category during that year.

– Business Insider SA

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