Game’s new look to come at a cost
• Owner Massmart says as many as 1,800 jobs at the loss-making retailer may be on the line
Walmart-owned retailer Massmart says it may cut up to 1,800 jobs at its Game stores in SA as part of its turnaround to improve the unprofitable business. The proposed cuts come as SA grapples with one of the world’s highest unemployment rates at 30.1%. Thousands of jobs are being lost in companies operating in sectors such as media, car rental, telecommunications and manufacturing, largely because of the coronavirus pandemic.
Walmart-owned retailer Massmart says it may cut up to 1,800 jobs at its Game stores in SA as part of its turnaround to improve the loss-making business.
The proposed retrenchments come as SA grapples with one of the world’s highest unemployment rates at 30.1%. Thousands of jobs are being lost in companies operating in sectors such as media, car rental, telecommunications and manufacturing, largely because of the coronavirus pandemic.
Game and Dion Wired jointly lost R676m in the 2019 financial year. Dion Wired has since been shut down.
Massmart, the owner of Builders Warehouse and Makro, warned recently it would announce losses when its halfyear results are released on August 27, suggesting Game has lost income for a second year in a row. The group expects losses of between 547.1c and 573c per share, up from the previous year’s 364.7c-382.2c loss per share. The losses would still have occurred regardless of the Covid-19 outbreak, it said recently.
No Game stores are set to be closed despite the proposed retrenchments, which amount to 3% of all Massmart staff.
The proposed retrenchments come as the group wants to change the Game model to consist of more customer service staff and fewer administrative personnel, it said on Tuesday.
Game MD Andrew Stein told Business Day in an interview recently that the company has also “reimagined the Game store of the future, which will be launched in Mall of Africa towards the end of August”.
The new-look store will have click-and-collect points for online shoppers, self-checkout till points and product vending machines. Self-checkout points would perhaps require fewer cashiers. The new store will have wellness and baby product categories as well as other new categories, he said.
In January, during the turnaround plan presentation to investors, Stein said products at Game were often out of stock and the product assortment lacked “coherence, innovation and relevance” to consumers.
He told Business Day last week that the retailer had just finished converting its computer systems to “a modern IT platform to enable considerably improved retail execution in our stores, specifically assortment planning and execution”.
In the Game turnaround plan, Stein said in January the store had an inconsistent customer service experience and long queues, slow checkout and an inefficient returns process.
Customer service consistency was being monitored on a daily basis, he said last week.
Stein said Game was “a trusted 50-year brand with a 150store footprint in Africa”.
He told Business Day that one in every three TVs bought in SA are sold by the store.
“It’s a powerful brand with high recognition and great customer loyalty, particularly in its core, mass middle-market customer heartland.”
In January, Massmart announced it may cut 1,440 employees across 34 Dion Wired and Masscash stores, as it closed Dion Wired for good and wanted to shut some Masscash stores. It said on Tuesday that all but 54 Dion Wired employees had been re-employed within the group.
At the end of December, Massmart had about 51,000 fulltime employees, at 443 stores. That included just under 12,000 employees in its Massdiscounters division, which had 173 Game and Dion Wired stores.
Massmart announced a turnaround plan in January, and said in June the effects of Covid19 had accelerated the plan. The restructuring will reorganise its four divisions into two.
Massmart Retail will comprise the Builders, Game and Cambridge Food trading brands. Massmart Wholesale will take in Makro, Masscash and the group’s wholesale cash brands.
Its overall SA sales for the 23 weeks to June 7 are down 11.5% year on year at R31.3bn. Massmart recently secured a R4bn loan from parent Walmart.
THE COMPANY HAS ALSO ‘REIMAGINED’ THE GAME STORE OF THE FUTURE, WHICH WILL BE LAUNCHED IN MALL OF AFRICA IN AUGUST