Another multibillion franchise pulls out of Ugandan market

By Desire Ayebazibwe,

PARROTS UG|BUSINESS:

Another multibillion retail supermarket, Massmart has announced its plans to exit the Ugandan market.

The giant South African retail supermarket with its stores at Lugogo by pass, popularly known as, Game Lugogo, is a parent company of Game Stores. It announced its closure on Friday, during the group’s virtual financial results presentation.

Game stores joins its peer Shoprite Holdings SHPJ.J which confirmed last month that it was pulling out of the Ugandan market over low returns.

During the virtual presentation, Massmart Chief Executive, Mitchell Slape said the difficult business environment has pushed the supermarket chain to dispose of its under performing 14 stores outside South Africa.

“The performance and the complexity in running those businesses is something that frankly we needed to address. We’ve commenced a formal sales process, we’re currently in discussions with potential purchasers to take on those stores,” Slape said.

“But that is not enough. Achieving break-even performance isn’t going to be sufficient for us to be satisfied, we’ve got to really get Game back to a healthy level of profitability and performance,” he added.

He added that the company opted to put up its five Game Stores in Nigeria, four in Ghana, three in Kenya, one in Uganda and one in Tanzania for sale to potential buyers in order to srablize its operatiins.

The Johannesburg Security Exchange-listed company expects its move to result into an annual profit before interest and tax improvement of 750 million rand ($50.24 million).

Game is a promotionally driven discount retailer of predominantly general merchandise and non-perishable groceries for home, leisure and business use. Some Game Stores also stock a select range of fresh food, including fruit and vegetables, pre-packed meats and pre-baked goods.

The franchise which has been in the country for 17years (since 2004) operates in other 11 African countries including: South Africa, Nigeria, Zambia, Ghana, Malawi, Mauritius, Mozambique, Namibia, Botswana, Kenya and Tanzania.