Massmart Holdings Ltd, one of South Africa’s biggest retailers’ majority-owned by Walmart Inc, has plans to have more stores in different parts in Africa between the year 2019 and 2021.
The Game Store owners in Garden City Mall, Massmart are said to have recorded a 31.7 percent fall in its earnings in the year ending 2018 affecting its shares significantly.
South Africa’s economy is reported to have stagnated and hence the reason why the company wants to have a third of the new space outside its home market as it’s a trend with other companies in the country.
Kenya and Zambia will in October get into the list of the 12 countries that Massmart has its 47 stores in Africa as the company plans to open their stores in the countries.
“Zambia and East Africa are interesting to us because they’re not dependent on mineral resources like West Africa is,” Group Chief Executive Guy Hayward told Reuters.
“Kenya and Zambia have quite strong tourism industries and a few local industries so the economic play there is a bit more robust.
The four stores that the company plans to open in Kenya will be dealing with building materials, supplying fresh food, home improvements, groceries, and appliances; something which the company is well known for, with five others opening in Zambia.
Hayward said his Africa strategy was about going “slowly and carefully.” He said the company was still committed to Nigeria, where it has five stores.
Massmart generates 91.3 percent of its groups’ sales in SA despite the reduced consumer spending brought about by increased fuel prices, unemployment and inflation, and value-added tax experienced in the country.
In the year ending 2017, the company recorded $800.88 Million which is a 5.2 percent growth of its total sales.
“We’re encouraged by that, but the readings that we’re getting about the economy are negative and muted and so are very cautious about the next six months,” Hayward said.
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