Game stores will ditch food and bring back cheap clothing – here's what we know about its turnaround plan
- Game's owner Massmart has promised investors a turnaround at the retail chain after "significant performance deterioration".
- Immediate plans include dropping food, bringing back "clothing basics", and selling cheap DIY supplies.
- Long queues and products that are out of stock have also been identified as big problems.
- Here's what we know about Massmart's plans for Game.
- Go to the Business Insider South Africa homepage for mores stories.
Big changes will be coming to Game stores around South Africa in coming months as its corporate owner, Massmart, starts implementing a turnaround plan after what it has described as "significant performance deterioration".
In a presentation to investors on Thursday, Massmart laid out the broad strokes of what it called a "Game reset" as a central part of a broader strategy to address trouble at the struggling behemoth.
Massmart also owns Builders Warehouse, Makro, and DionWired – which it looks to be in the process of shutting down.
The plan includes a major overhaul of approach and corporate structures, including reorganising Massmart into two divisions, one for retail and one for wholesale. But for consumers the most visible changes are likely to be better service, and a dramatic change in what Game stores sell.
Game introduced food in 2014, after a serious fight with the likes of Shoprite and Pick n Pay, which pushed malls to block Game from becoming a fresh-foods retailer.
But its "fresh and frozen" category has not been a success, Massmart said on Thursday, and will be phased out alongside other "poor performing categories" such as music and movies.
Eventually, Massmart said, it will look to "re-invigorate" groceries at Game, and introduce sections for wellness and party supplies. But in the shorter term it is going back to some previously good performers, including what it describes as "clothing basics".
Those clothes, as well as DIY supplies, are due to be sold under EDLP, or everyday low price, a strategy that promises consumers that the prices are good, and that they need not wait for special promotions.
Massmart also identified long queues, products being out of stock, and an inefficient returns process among Game's problems.
By Massmart's estimation, Game currently sells one of every three TVs bought in South Africa, and one in every three large appliances generally.
The new approach appeared to be a hit with investors, who have had a generally negative view of Massmart's prospects.
Massmart share was down 4% on opening and sens announcement. Now up 5% after showing market new strategy. Will see where price goes. Interesting did not really discuss results at all. Was about strategy and future.— Wayne McCurrie (@WayneMcCurrie) January 30, 2020
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