Walmart-owned retailer Massmart, whose brands include Makro and Game, says the easing of Covid-19 restrictions helped improve sales towards the end of 2020, but consumers remained under pressure.
Group sales in the 52 weeks to December 27 fell 7.7% to R86.5bn, Massmart said in a trading update on Thursday, but declined 4.1% in the group’s fourth quarter, which was an improvement from earlier in the year.
Many of the Covid-19-related trading restrictions were lifted in the fourth quarter of 2020, the group said, which allowed trading to resume in most categories. Liquor trading, however, continued to be affected by limitations on trading hours as well as reinstated trading restrictions as announced by the government in December, the statement said.
The economic impact of the pandemic on consumer spending was evidenced by a general reduction in foot traffic, particularly in regional shopping malls, affecting sales in many merchandise categories during the quarter. The group, however, reported a stronger sales performance in its home improvement and do-it-yourself categories.
Massmart was struggling with costs even before Covid-19 hit, and brought in Walmart veteran Mitchell Slape as CEO in September 2019 to spearhead a turnaround effort.
The group officially unveiled this strategy in January, involving cost cutting, including jobs and stores, and a restructuring into two divisions.
Massmart said on Thursday it had also now concluded a managed-services agreement, covering its financial transaction processing activities such as tax, with US professional services firm Genpact.
Genpact is a strategic partner of Walmart Enterprise Business Services, but is not a related party to Walmart, or to Massmart, the group said.
Genpact manages operations for many Global Fortune 500 companies across several industries, including retail and consumer goods, which is its fastest-growing business, Massmart said.