Massmart to sell Cambridge Food, Rhino, and Massfresh businesses
The alcohol sales ban had a devastating impact on the retailer's non-core assets.
Last year, Massmart’s revenue fell to R86.5 billion, representing a 7.7 percent decline in profits. But the numbers were hardly surprising, given the restrictions on travel and alcohol sales during the lockdown, which also led to reduced demand for goods from the hospitality industry.
The group, which also owns Game, Makro, and Builders Warehouse, revealed plans to sell its poorly performing and lower profile food businesses this week. Barclays will facilitate the sale of Cambridge Food, Rhino, fresh produce wholesaler Massfresh, and meat processing facility assets. The group also announced that it would be reviewing its operations in the SADC region.
The markets reacted well to the move to dispose of non-core assets. Shortly after the announcement, Massmart shares jumped just over 20 percent, to R54.10.
"These decisions are indicative of a strategic shift to concentrate on areas of market leadership, areas where we believe we have the strength against our competitors," said Massmart CEO Mitch Slape.
National lockdown saw an increase in consumer spending on home improvement and DIY projects, raising profits at Builders Warehouse stores. The company also wants to focus on its e-commerce strategy, in line with a big jump in online sales during the pandemic. Massmart plans to launch its own apps and is the anchor tenant on Vodacom’s new shopping app, which will establish them as the second-largest online retailer after Takealot.