Massmart racked up another loss in six months to end-June, underscoring the enormity of the task that lies ahead for new CEO Mitch Slape in turning around the fortunes of the struggling retailer.
Massmart, which owns household brands such as retail chain store Game and building material retailer Builders, is in the midst of a turnaround strategy that has seen it sell its loss-making Rhino and Cambridge food businesses to Shoprite Checkers over the past week.
Slape has been leading efforts to cut operating costs, improve profitability and improve the product assortment and availability at Game. Slape and two other Walmart executives brought in to SA are overhauling Massmart’s supply chain and logistics capabilities and investing in improving e-commerce. The US retail titan has majority shareholding in Massmart.
Releasing its financial results on Friday, the company said total sales rose just 4.4% to R41bn in the 26 weeks to end-June. The numbers are compared to the first half of June 2020, which was marked by first hard lockdown restrictions, which only permitted essential services. Same store sales rose 6.6%.
The ban and restrictions on the sale of alcohol cost Massmart R770m in lost sales during the period, though it was an improvement on the R2.1bn it suffered a year before. Liquor sales made up 14% of total sales.
The headline loss was R645.4m during the period, representing an improvement of 40.8% on the loss of R1.09bn recorded a year before. Massmart took a R593 writedown charge on the struggling retail chain Game.
Massmart said foot traffic in many super and regional malls and retail centres remained low compared with pre-pandemic levels, as consumers preferred local and more convenient shopping options in light of Covid-19 infection concerns.
With Katharine Child
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