Source: CNBC Africa
Massmart had a tough financial year, reporting a decline in headline earnings per share by 31.7 cents.
The biggest contributor to the company’s decline were Game, Dionwired and Hi-Tech.
Investors have been surprised by the extent of the decline.
According to Massmart CEO, Guy Hayward, the company’s sales are an accurate depiction of the general state of the South African economy.
“We are also disappointed in our profit growth, which is down 16%,” he says.
Food and Game are already 22% of total sales, and 2018 saw a move to Johannesburg and the restructuring of management and support roles.
“We are confident that we are doing the right things and that customers will respond to us in 2019,” Hayward says.
Turning Game around
Game will be kept very relevant to customers. The R20-billion business has up to 40% market share in many places; in fact, the company sees one in three TVs sold through it.
Going forward, Game will need to drive down costs and manage selling prices better.
“We need to make sure we offer customers wonderful merchandise that is very well priced. We need to shout about it; we need to make sure they know what they can buy in Game. We need to offer exciting products – maybe exclusive deals we have that no one else has, and we need to make sure our food is very well priced,” Hayward concludes.