Game continues to bleed - sales even lower than in pandemic-hit 2020

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Game reported lower sales than in pandemic-hit 2020.
Game reported lower sales than in pandemic-hit 2020.
Tebogo Letsie
  • Game's total sales have plummeted to levels lower than during the hard lockdown in 2020. 
  • Massmart said the retailer was hit by continued weak shopping visits to regional malls and retail centres.
  • Massmart's share price dropped by more than 6% in morning trade.  

Retailer Massmart said Game's total sales of R7.6 billion for the six months to end-June was 7.6% lower than the same period last year - despite stores being closed for weeks in 2020 due to the hard lockdown. Sales from its South African stores were almost 5% lower than last year.

Massmart says shopping visits to regional malls and retail centres remain constrained. The group said consumers prefer to avoid crowded indoor spaces in light of Covid-19 infection concerns and consequently - given Game's relative high presence in these locations - it has suffered.

Across all its retailers - which also include Makro, Rhino, Cambridge Foods and Builders Warehouse - total sales rose by 4.4% to R41.3 billion.

The group expects a headline loss of between R316.9 million to R399.9 million, from a loss of R830 million previously. Its profit was hit by an impairment of the carrying value of assets in Game of approximately R570 million, as well as retrenchment costs "relating to the reorganisation of certain home office support functions".

Its trading update triggered a sharp 6% loss in its share price in opening trading on Friday. 

For Makro, total sales increased by 13.5% to R13.7 billion over the comparable period, while total sales in its Cash & Carry business of R9.3 billion were 2.3% lower.

Due to ongoing lower activity in the corporate, hospitality, restaurant and catering industries, the group said its food sales remained under pressure, decreasing by 2.9% in Makro and 8% in Cash & Carry.

However, total liquor sales were 39.6% higher than the same period in 2020, which was impacted by the ban on liquor sales in place in April and May 2020.

Builders Warehouse saw a 24% increase in sales to R7.2 billion, driven mainly by strong retail demand. Trade sales continue to be muted due to the slowdown in the construction industry.

For Cambridge, total sales were 9.4% lower to R3.6 billion as customers in this segment of the market are mostly impacted by the pressures of increased unemployment and lower disposable income, said the group.

With regards to the damage caused by the civil unrest in KwaZulu-Natal and Gauteng, which impacted 43 stores, operations in eight stores have already restarted and most stores should be open for business in the coming weeks, said the group.

"Insurance cover is in place, but will not fully offset the losses suffered," the group warned.

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