Massmart gets nod from Competition Commission for sale of fresh-food assets
The commission has recommended the Competition Tribunal approve the R1.36bn deal that forms part of the retailer’s turnaround.
Massmart, the owner of Game and Makro, says the Competition Commission has recommended the approval of a R1.36bn sale of its fresh-food assets to Shoprite.
The recommendation that the tribunal approve the transaction does come with conditions, Massmart said in a statement on Friday. The retailer did not go into detail, but such conditions often include commitments to avoid retrenchments.
Massmart announced the sale in August, and would see Shoprite acquire 56 Cambridge Food and Rhino stores and Massfresh — which comprises The Fruitspot and a meat processing facility — as well as 12 Cash & Carry stores.
Shoprite has indicated it is looking to beef up its interest in the low-income market, a growing retail space in SA as consumers hunt for discounts.
The sale forms part of a turnaround plan led by former Walmart executive and CEO Mitchell Slape to bring the ailing group back to profitability after three annual losses of more than R1bn.
Slape has shut down tech chain Dion Wired, merged four company units into two, outsourced software support to a Walmart centre in India, and accelerated investment into e-commerce.
Massmart had indicated on Thursday that the assets, being held for sale, had weighed on its performance in the 19 weeks to May 8, with discontinued operations seeing a 15.4% sales decline.
Cambridge was under particular pressure, with sales falling 18.6% to R2.2bn. This business has been directly affected by the civil unrest that took place in parts of KwaZulu-Natal and Gauteng in July 2021, as affected stores had not reintroduced all product categories.
The discontinued operations accounted for less than a tenth of the groups total R30.4bn in total sales, down 0.2% for the period.