Massmart's 'The Last Chance Store' is a winner with bargain-hungry customers

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Katherine Madley, Massmart’s marketing vice president says, “The South African consumer is under considerable economic pressure, certainly amongst the worst that we have seen in a long time. This has resulted in keen price sensitivity to home essentials products whilst also eroding discretionary spending on non-food products, like appliances.”

The idea of clearance outlets is not new in retail and Massmart does, from time-to-time, clear products through clearance outlets. In addition to the clearance outlet, Massmart has responded to this situation in a variety of ways and the consumer has noticed.

Makro has been recognised for three consecutive months for having the lowest cost basket on a basket of grocery essentials by The Outlier while Game has invested in the price of home essentials resulting in high double-digit sales growth.

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Massmart specifically located The Last Chance Store alongside Game because of its appeal, particularly with the Game customer. The store is located within a regional mall versus more traditional locations such as strip malls and the product range is carefully curated.

The product selection comprises in-demand products that consumers are prepared to forgo at normal retail prices. Discounts in the store range from 30% to 60% and include products such as party consumables, small appliances, TVs and tools.

Madley adds, “There can be a misconception around clearance stock being damaged or inferior. This is not the case in our Last Chance Store where we are discounting stock that is slow-to-sell simply because under-pressure consumers can’t afford to purchase it at normal retail prices.”

Massmart will continue a limited trial of the concept before deciding on further investment in the format.