Integrated Annual Report 2021
Integrated Annual Report 2021
TRADING GENERAL MERCHANDISE AND FOOD RETAILER
Game is a leading sub-Saharan Africa omnichannel discounter offering middle-income families a curated assortment of appliances, electronics, lifestyle merchandise, groceries, liquor and valueadded services at everyday low prices.
8.7%
R15.3bn
DECREASED SALES
2020: R16.7bn
90bps
26.5%
DECREASED GP MARGIN*
2020: 27.4%
93.6%
(R1,031.1m)
INCREASED TRADING LOSS**
2020: (R532.5m)
146
stores
in South Africa, Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Tanzania, Uganda, Zambia
DEC 2020: 149
* Excludes inventory write-offs as a result of the civil unrest.
** Business unit trading profit/(loss) includes Corporate allocations.

2021 Highlights

  • 10% discount offered to:
    – pensioners every day of the week
    – students on Mondays
    – vaccinated customers on Wednesdays
  • We maintained our Clean/ Fast/Friendly score at 4.5/5 since the report’s inception in July 2020
  • Grew online sales by 72.0%
  • Relayed 114 South African stores
  • Our top 10 products by Sales Units were Essentials
  • Nine of our top 10 products by Sales Rands were Electronics
  • While our average foot count per week was down 9.9%, on average basket sizes were up 7.4% per week
  • Re-opened seven of the ten stores impacted by the civil unrest during the year
Our Customer Value Proposition (CVP)
Unbeatable prices: We use our EDLP pricing model to offer our customers unbeatable value-for-money products
Convenience: Our wide in-store and online footprint and in-stock consistency make shopping at Game convenient
Simplicity: Our efficient self-service, knowledgeable and friendly associates, modern and relevant store formats and reliable after-sales service make it simple to shop at Game
Curated assortment: Through our broad range of trusted brands targeted at meeting our customers’ personal preferences we deliver unbeatable value
2021 Strategy
  • Implement new South African Game store operating model and embed new processes and ways of working post our Section 189 process
  • Successfully integrate our business into the Massmart Retail business unit
  • Continue to rebuild Game’s rebel brand identity to win with key growth segments, including millennials and young families
  • Complete the exit of Fresh and the introduction of Clothing
  • Expand Private Brand offerings
  • Increase online sales participation by extending our sellable online range, launching Pickup points and building a distinctive final mile delivery capability
  • Resolve remaining SAP S/4 HANA challenges to fully leverage the system and significantly improve stock availability
  • Extend EDLP pricing model across additional categories and improve price perception, particularly in our Essential categories
  • Review our Africa portfolio strategy
The challenges we faced
  • SAP S/4 HANA ERP integration, which resulted in prolonged and significantly reduced in-stocks
  • Constrained supply, such as gym equipment and bicycles not meeting customers increased demand for work-from-home and stay-at-home merchandise
  • Reduced footfall in Super-Regional and Regional Malls in favour of Convenience Malls and Value Centres for majority of the year
  • The reduced disposable income of customers resulting in intense competition for consumer spend
  • Tightening of credit approvals resulting in reduced credit spend
  • Global supply challenges in Cellular, Laptop and TV markets, e.g. panels and microchip processors
  • The loss of imported stock when two DCs were significantly damaged during the civil unrest
  • Ten stores were impacted during the civil unrest
  • Estimated lost sales of R349.5 million, with an estimated lost trading profit of R246.6 million due to the civil unrest and Covid-19 trading restrictions

 

  Read more detail on our year of unique challenges

Our progress during the year
  • Game was successfully integrated into the Massmart Retail business unit, we implemented the new South African Game store operating model and embedded new processes and ways of working
  • We completed the exit of Fresh and the roll out of basic apparel in all Game South African stores
  • Successfully relayed 114 South African Game stores to Stores of Excellence
  • Rolled out signage packages to 37 stores
  • Enhanced our online capabilities and widened online assortment levels by:
    • Incorporating approximately 10,000 articles
    • Increasing our online sellable range to 79% from 48% in 2020
    • Improving delivery lead times from 7-10 days to 5-7 days
    • Increasing online sales by 72.0%
  • Resolved most challenges experienced with the SAP S/4 HANA implementation
  • Excellent expense management and cost-saving initiatives in place resulted in a 5.8% decrease in expenses
  • We implemented the EDLP pricing model in four categories
  • The divestment of 14 East and West Africa stores and 15 South African stores is in progress
Our strategic focus in 2022
  • Drive sales volumes and gain market share
  • Complete the divestment of our 14 East and West African stores, and 15 South African stores
  • Significantly improve stock availability in-store and online
  • Complete the roll out of new signage packs to all South African Game stores as part of our store renewal programme
  • Launch our new website and Pickup fulfilment offerings
  • Extend sales channels and service offerings, including online
  • Strengthen store execution and improve omnichannel customer experience
Future outlook

Our goal is for the Game core business to return to solid financial performance.. We plan to do this through concluding the divestment of the 14 Game East and West Africa stores and 15 South African Game stores, which will create further overhead cost reduction opportunities and a stronger and healthier core business positioned for growth. We will continue with our CVP interventions, focusing on restoring sales growth through the completion of our store renewal programme, revitalisation of our merchandise proposition, acceleration of our omnichannel offering and further improvements in customer experience.