Massmart is testing a new concept of small-format Makro stores by replacing existing Game stores in popular shopping malls. The company aims to make Makro more accessible to a wider market while exploring the viability of this new format.
Massmart is planning to replace some Game stores in popular shopping malls with smaller Makro stores. This trial, announced in April 2024, aims to test the viability of this new concept. Brian Leroni, Massmart 's Senior Vice President of Group Corporate Affairs, explained that the decision to use existing Game store locations was driven by the need to find suitable retail space in busy shopping centers.
This move has sparked speculation that Massmart might eventually convert all Game stores into Makro outlets. Game has struggled for years and has been a drag on Massmart's overall performance. Owned by Walmart, Massmart operates various retail brands, including Game, Makro, Builders Warehouse, Jumbo, and Shield. While Makro and Builders Warehouse are performing well, Game's sales have been declining significantly.Evan Walker, portfolio manager at 36ONE Asset Management, believes this plan has been in the works for a decade but was previously shelved due to the previous management's belief in the Game brand. Walker supports the initiative, stating that Makro is a strong brand with a wide customer base and that converting Game stores would benefit both Makro and Massmart. He argues that it would increase foot traffic in Makro stores and expand its distribution network, particularly strengthening its e-commerce capabilities.Leroni, however, denied that the trial is intended to assess the feasibility of replacing Game stores with small-format Makro stores nationwide. He emphasized that the goal is to make Makro more accessible to a wider market through this smaller, mall-based format. He also assured that there are no plans to convert Game stores into Makros and that no jobs will be lost. He stated that the project aims to test the feasibility and consumer response to the smaller format and its convenience. If successful, Massmart will follow its usual real estate procedures to secure suitable locations for the new format. Despite this denial, some see this as a way for Massmart to try and salvage the struggling Game brand while simultaneously expanding its successful Makro chain. When contacted for an update on the project, Massmart declined to comment further
MASSMART MAKRO GAME RETAIL TRIALS
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