Dion Wired, Baywest Mall, Port Elizabeth. Picture: MIKE HOLMES/THE HERALD
Dion Wired, Baywest Mall, Port Elizabeth. Picture: MIKE HOLMES/THE HERALD

Walmart-owned retailer Massmart, whose brands include Makro and Game, will close 23 DionWired stores on Thursday as it battles with municipal cost increases and a consumer environment characterised by rising unemployment and subdued wage growth.

The stores will be closed after talks with labour ended with all options being exhausted, Massmart said in a statement.

The group had said in January that it may close up to 23 DionWired and 11 Masscash stores, which could affect 1,440 employees.

A decision to cease trade in relation to the 11 affected non-performing Masscash stores has yet to be determined by management, Massmart said on Thursday.

At the end of June 2019, Massmart had about 46,500 full-time employees, at 441 stores.

In July, the company reported its first trading loss since listing on the JSE in 2000, saying that in the 26 weeks to end-June 2019, employee costs had risen 8.6% year on year, while sales had risen 5.5%.

Factors also pushing up costs included increased municipal tariffs and electricity costs as well as load-shedding, the company said at the time.

gernetzkyk@businesslive.co.za