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Sat Oct 25 13:16:34 SAST 2014

Massmart aims a low blow

THEKISO LEFIFI | 08 January, 2012 00:15

THIS morning Massmart and Walmart gave their competitors more grey hairs with the launch of their third extended price-cut promotion, which will last until March.

THIS morning Massmart and Walmart gave their competitors more grey hairs with the launch of their third extended price-cut promotion, which will last until March.

Massmart said the previous two 10-week sales saved consumers about R100-million. Company spokesman Brian Leroni said the sales promotions were a joint venture between the retail group's subsidiaries Makro, Game, DionWired and Builders Warehouse.

The extended sale period is something that Walmart, Massmart's largest shareholder at 51%, asked the local retailer to test soon after the US company's buyout was concluded.

Jon Martinek, merchandising executive at Massmart, said the company and its suppliers benefited from increased retail sales volumes even though prices were substantially reduced.

The group would not reveal how much revenue these promotions generated on their own.

Grant Pattison, Massmart's CEO, said sales during the second month of the sale mostly exceeded those in the first month, "suggesting that lower prices for longer periods really resonate with customers".

Leroni said the promotions were starting to give the group insights into how consumers react to an "everyday low-price" position, which is Walmart's philosophy.

SA retail consumers are more used to "high-low promotions" which last for short periods of time. For example, Hi-Fi Corporation had a sale that started on Thursday and ends today.

Pick n Pay CEO Nick Badminton said the company's "smart shopper" loyalty programme - to which four million customers have signed up - offered not only lower prices but benefits on certain products throughout the year. He said the retailer was "very happy" with its current growth, particularly in December.

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