Massmart is selling its non-core food assets to rival Shoprite Holdings for 1.36 billion rand ($89 million) to focus on businesses with high returns, the South African retailer controlled by Walmart said on Friday. Massmart is in the middle of a turnaround that has now moved beyond shutting underperforming stores and replacing fresh and frozen food at its Game chain with clothing.
South Africa's big retailers are working round the clock to replenish shelves with food in hundreds of stores looted this week in some of the country's worst unrest for years, they said on Friday. Massmart, which is majority owned by U.S. retail giant Walmart Inc, said protesters had looted 41 of its stores and two of its distribution centres, with four sites suffering significant damage from arson. TFG, the owner of Foschini clothing and @home chains, said 190 stores had been looted and damaged to varying degrees.
After a losing bet on the potential of economies across the African continent, South African retailers are in retreat to their home market - and their timing could hardly be worse. In recession-hit South Africa, consumer spending is shrinking as unemployment has hit a record high. At the same time, foreign rivals, possibly helped next year by the opening of the African Continental Free Trade Area (AfCTA), could find profits in the very markets South African players have had to abandon.