Game exit extends losing streak of South African firms in Kenya

Stung by dwindling returns due to low customer footfall in its branches, Game stores is exiting the supermarkets scene in Kenya.

Game brand of stores, which is owned by South African supermarket giant Massmart announced on Friday last week that it had put up 14 Game outlets in Kenya, Uganda, Tanzania, Ghana and Nigeria for sale.

The company said it will dispose the loss-making units even as the management focuses on the retail chain’s core strength especially on high return assets as well as online.

In Kenya, Game stores are located at Garden City Mall along Thika Superhighway which was the first premises in Kenya in 2015 followed by the Waterfront Karen and Mega City Mall in Kisumu that took over the void left by debt-ridded Nakumatt.

Since setting foot in the country, the company has struggled to crack the industry which is now dominated by local supermarkets.

Initially, Game stores set out to acquire a majority stake in Naivas supermarket but it failed.

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“We have reached the conclusion that the performance and complexity in running the 14 stores in five markets in East and West Africa is something frankly that we needed to address,” said Massmart CEO Mitch Slape during the group’s virtual financial results presentation on Friday.

Mr Slape said the company was in talks with potential buyers but did not reveal the details of the transaction. Furthermore, the company confirmed that the interest of workers and suppliers would be safe in the exit plan.

Game exit from Kenya introduces another page in the story of South African companies that have failed to grow root in the country’s industry.

In January this year, Game’s peer Shoprite left Kenyan market barely two years after launching citing underperformance of its supermarkets.

The South African supermarket chain has entered Kenya hoping to make the most of the collapsed retail giants Nakumatt and Uchumi.

In 2020, another South African firm, The Foschini Group (TFG) also left Kenyan market four years after setting base in Nairobi.

TFG, a jewelry and clothes store blamed high VAT charges, runaway costs of doing business and unfavorable laws as some of the reasons for its exit.

Twenty years ago, South Africa’s brewing giant, SABMiller, handed over the production of its key beer brands to Nairobi-based East African Breweries Limited.

The brewer said it couldn’t compete with the region’s largest brewer which marketed Kenya’s brand Tusker under ‘my country, my beer’.

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