Although this growth has come off a low base, the chain's food execution has over the last year been jacked up through a rebranding, as well as better display and space allocation. It helps that Massmart has also snapped up a few strong food experts from its competitors to drive the business.
Traditionally, Game sold general merchandise and dry groceries such as biscuits, and detergents such as washing powder, but decided to venture into the fresh food market about three years ago.
"Wherever there was fresh food, the store growth was (two percentage points) ahead those stores that didn't have any fresh food. So we expanded and improved the offering even more. Over the last two months, for example, the Rosebank store has reversed its negative store growth," says group food retail manager Peter Arnold.
Game has canned the Foodco brand and is adopting Walmart's Marketside brand to encompass its total food drive.
However, changing the perception of what a Game store offers is difficult. Shoppers are more accustomed to coming to its outlets to buy laundry baskets or vacuum cleaners, and visiting retailers such as Pick n Pay, Woolworths and Shoprite to do their trolley shopping.
Game is particularly affected because its core target market is middle-income consumers, who are most susceptible to economic headwinds and generally shy away from big ticket items such as refrigerators in tough times.
"A large portion of food shoppers are actually existing customers. Once they come in, they might say, 'I'm not ready to buy food now, but on my next visit I will because now I see you're selling bread or potatoes etc'. There is quite a lot of converting of new customers, and word of mouth is helping too - that we are competitive, the quality is good and the offer is decent," Arnold says.
In-store staff, who tended to be more skilled with general merchandise, have been trained to deal with stock that expires on a regular basis.
Alex Sprules, a research analyst at Imara SP Reid, says a fresh-food offering is positive for Game because it provides consumers with a reason to consistently visit its stores.
"The market may already have large, established players but Massmart has an extensive distribution network that can provide many more products at competitive prices. Massmart's management will have thought this out and must have established that the regular customer will buy a large amount of staples from them; otherwise it would not have made sense to provide this offering," he says.
The company has had the benefit of learning from Asda, which is Wal-Mart's grocery operation in the UK.
Game has adopted its budget-themed "Price Lock" campaign, which holds the price of food staples for a fixed period of time.
There are now more than 66 Game stores that have a freshfood offering. If Massmart has its way, its remaining Game outlets - about 60 - will also be outfitted with a fresh selection, but that depends on the Competition Commission. The company last year filed a complaint with the body, saying its plan to introduce its fresh food business at Game stores in malls was being stymied by rivals Shoprite and Pick n Pay.
Exclusivity provisions in lease contracts at malls where big grocers are anchor tenants often block the sale of certain types of food and groceries by other retailers.
"A positive outcome for Massmart may be viewed negatively by the competitors as it would void certain clauses in the contracts signed as anchor tenants, and may make large investments in malls less viable," Sprules says.
Source: Business Day via I-Net Bridge
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