Massmart Annual Report 2008

Further reading

See Making customers Eco-wise

 
 

Consumers have the right to expect that the food they buy is not only healthy, but manufactured and packed hygienically.

 

That's why we've made food safety a bread and butter issue.
Food Consulting Services (FCS) laboratory in Midrand

Customers

IMPACTING

Retaining and growing our customer base while bearing social and environmental challenges in mind is key to the sustainability of our business. is requires that we not only satisfy our customers’ needs for quality and value, but that we also make a conscious e ort to nurture responsible consumerism by empowering shoppers to make informed merchandise choices.

Customer satisfaction scorecard

Sustainability indicator 2008 (%) 2007 (%) 2006 (%)
Massmart shoppers who were able to make their planned purchases in Massmart stores
88,0 78,0 85,0
Shoppers who were totally or quite satisfied with the shopping experience in Massmart stores 85,0 76,7 93,0
Shoppers who indicated that they would repeat shopping at Massmart stores 91,0 89,0 98,0
Customers who were satisfied with the resolution to problems raised with the store 83,0 76,6 73,0
Customers who feel that the prices of products are always competitive at our stores 81,0 71,6
* Excludes data from Massdiscounters

Independent food quality controls tests conducted (July 2007-June 2008)

2008 Feedback

Review the social proposition underpinning selected Massmart merchandise brands.
We focused on private label products and resolved to test a process to conduct independent reviews of the sustainability practices of direct import suppliers.

2009 Priorities

Implement the Eco-wise customer advocacy programme in at least three general merchandise categories.

Implement a Massmart-managed call centre to enhance customer support for our Trojan private label.

Prepare the Group for compliance with the principles proposed in the Consumer Protection Bill.

ACTUALISING

What we’re doing to safeguard our customers

Our profitability depends on our reputation with our customers, the majority of whom are within the Living Standard Measure (LSM) 4 to 10 brackets. We do our utmost to provide good customer service, to safeguard our customers and their possessions in our stores and to remedy shortcomings if our products or services fall below the standards to which we hold ourselves.

We recognise our duty of care to distribute goods that meet stringent quality and safety standards. In the case of some products, we’re now moving beyond relying purely on supplier quality assurance and have started verifying quality standards ourselves.

Although Massmart will always be a low-cost mass merchant of mainly branded consumer goods, we want to do more than simply react to changing customer attitudes toward social and environmental issues. We’re developing strategies to advocate more responsible consumer behaviour by increasing the selection, visibility and promotion of branded merchandise with socially responsible attributes and associations in our stores.

Extending food safety assurances

The South African Department of Health reported in its 2007 review that as many as 1 886 cases of food poisoning and 51 deaths from eating contaminated or spoiled food occurred between 2001 and 2005.

As retailers, we have a responsibility to ensure the safety of the products we sell in our stores. Because most of the food we distribute is branded merchandise we, like many of our retail peers, have relied on our suppliers to ensure their foodstuff meets expected safety specifications.

During the much-publicised discovery of illegal dye Sudan Red in certain branded food products in 2005, we started rethinking the merit of this approach and began to ask our suppliers for additional quality assurance. We have subsequently decided to take the process even further and have just begun applying the same testing we have always used for our private label food products to nationally branded goods, starting with high-risk perishables. Key to this process is the implementation of random audits to help ensure that all relevant health and safety requirements are being met by food manufacturers. To further emphasise the value we place on food safety, supplier membership of the Consumer Goods Council of South Africa’s (CGCSA) Food Safety Initiative will be a condition for trade with Massmart from 2009.

Reacting quickly to in-store incidents

When it comes to safety, we recognise the importance of ensuring the physical safety of our customers, staff and trading partners in our stores.

Our high-volume merchandise model means our stores are always well-stocked with merchandise, often stored above head level. Forklift operations are common in our Masscash, Massbuild and Masswarehouse divisions so ensuring the safety of the thousands of customers who pass through our doors on a daily basis is challenging.

Daily in-store safety checks, strict adherence to safety protocols and biannual safety audits keep us focused on in-store safety. Our success at operating safely in this high-volume environment is demonstrated by our estimate that one safety incident occurs for every 1.9 million customer transactions. This statistic is monitored closely within the divisions and on a group-wide basis to allow early detection of any increase in incidents. During a routine review of public liability incidents in 2007, we were concerned by an increase in the number of serious injuries to customers by falling merchandise. Our CEO initiated a full store safety review to re-examine licensing of forklift drivers, the effectiveness of our forklift safety procedures, the assessment of merchandise stacking and storage protocols and the upgrading of our first response protocol to customer injury.

A key principle of this review was emphasising to store managers that they are expected, regardless of where perceived liability lies, to ensure anyone injured in our stores receives high quality medical care both in-store and after transfer into the hands of qualified medical practitioners.

To this end, our emergency response policy gives store managers full discretion to contract private medical care for injured customers and commits them to providing post-incident support including trauma counselling for family members and child care assistance for children of injured parties, and facilitating public liability insurance claim applications where appropriate.

COUNTERACTING

Responsible distribution of merchandise

Although we have increased the intensity of our focus on the health and safety aspects of the goods we sell, it is important to appreciate that some merchandise, like tobacco products have negative health effects. The distribution of these products presents a dilemma which we attempt to resolve by committing to sell these products in a responsible manner and in strict accordance with the letter and spirit of the law. We continue to debate the merits of moving beyond this position to define and adopt additional voluntary codes of conduct that move beyond legislated standards.