Mitchell Slape, the new Massmart CEO, will have his work cut out for him when walks into his Sunninghill, Johannesburg office on 2 September to officially resume his duties of reviving the struggling retailer’s fortunes.
Several factors have pushed Massmart into losses. The main factor is South Africa’s economy and consumer spending , which have deteriorated over the past five years. And Massmart’s management, led by former CEO Guy Hayward since 1 June 2014, has battled to ride out the moribund consumer environment. It was a logical move at the time. Walmart saw Massmart as being part of its broader strategy to get into high-growth African markets, the rand was trading at around seven to the dollar , South Africa’s economy was growing by 3% despite a global financial crisis and retail sales grew by more than 5% on an annual basis.
At a recent Massmart results presentation, Slape told investors Walmart still sees “long-term prospects” in Africa. Slape was not available for an interview withbecause Massmart said he wanted to spend the first few weeks on the job engaging with staff and “get[ting] to know the business”.Questions about Walmart’s commitment to Massmart are not misplaced. Since Doug McMillon was appointed as Walmart’s CEO in 2014, the retail group has been exiting underperforming international businesses.
Klipin said Massmart might sell Cambridge Foods, a grocery retailer focusing on low to middle-income consumers.
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