Walmart-owned Massmart will sell eight of its Masscash stores in South Africa to Devland Cash and Carry. Three more stores may yet get sold and Massmart is looking to close a further 14 Masscash stores. The moves come as CEO Mitchell Slape tries to streamline the business and turn it around.
South Africa’s Competition Commission has approved the sale of the outlets to Devland. Devland is Johannesburg-based cash and carry chain with a store network of 24 stores across cities including Johanesburg, Cape Town and Pretoria.
Massmart CEO Mitchell Slape is trying to streamline the business to bring efficiencies and cut costs. One issue for the Masscash division is complexity: it runs wholesale businesses under the CBW, Jumbo Cash and Carry, Trident and Shield banners and retail stores under the Cambridge Food and Rhino banners.
Despite all of this, Shoprite not Massmart is typically seen as the price leader. Slape identified this issue back in January 2020’s turnaround plan, which acknowledged “the current operating model has led to blurred go-to-market focus, structural complexity, and siloed ways of working.” Massmart also operates the Game discounter and DionWired discount electricals banner (and has already closed several DionWired stores). It also operates the Makro banner for its warehouse stores
A year later, Slape is still reforming the business and reshaping the proposition. For the year ended December 27th 2020, Massmart the Group’s full year sales of R86.5 billion was 7.7% lower than 2019, with comparable stores sales being 7.5% lower. In 2020 it lost up to R1.8bn ($121m), deepening its losses from the year before. The group points to it narrowing its headline losses (headline losses exclude costs associated with the sale or termination of discontinued operations, fixed assets or related businesses, or from any permanent devaluation or write-off of their values). Headline losses have narrowed to R901m-R1.2bn ($65m-$82m)