Massmart hit by crime woes

Johannesburg - Retailing giant Massmart said on Thursday the recession has sparked an increase in crime at its operations, marked by an uptick in fraud, store robberies and shrinkage.

"The recession has emboldened criminals," said CEO Grant Pattison in commentary accompanying Massmart's results for the year to June 28. "Not only has crime escalated, but we have also seen a pattern in the type of crime that is hitting our stores."

Chief financial officer Guy Hayward said these crimes have dented Massmart's profits. "It is not your average Joe Block on the streets that is stealing from us; it is hardened, well orchestrated crime that we are suffering from."

The group reported an increase of 10.7% (R43mil) in sales for the period under review, although profit declined by 4.3%.

"We need to take into consideration that this is the first recession South Africa has had to go through in 17 years, so in the circumstances, these are good results," said Hayward.

Hayward pointed out that despite the economic downturn, Game stores are continuing to grow not only in store numbers, but also in profitability. "Our Game shops are doing well, both in South Africa and outside the country," he said.

Hayward said Massmart will expand its African operations, aiming to increase floor space by an average 5% per year.

Hayward was hopeful that continuing industrial action at the group would be sorted out soon. "Both sides have to reach a compromise and we hope to find a way of bringing an end to this strike. said Hayward.

- Fin24.com