WELCOME TO OUR ONLINE ANNUAL REPORT 2011

Our business model

MASSMART GROUP

Massmart has evolved a business model that empowers its Divisions to take trading decisions suited to their individual operating needs but within a strategic operating and financial framework set by the Group.

This has several advantages. The framework guarantees consistent compliance with the best governance standards and national legislative requirements. It commits each Division to implementing Massmart’s core strategy of being a high-volume, low-margin distributor of quality branded consumer goods for cash, and ensures expansion plans add net value to the Group. At the same time, Divisions can extract greater value from being part of a larger Group with greater access to goods and services or negotiating better terms and rebates with suppliers and service providers. The Divisions are differentiated as retail or wholesale formats that address different customer and market profiles.

The model operates through four entities:
  • Massmart Holdings, the shareholder of the operating Divisions that consolidates the Group’s financial, treasury, tax and company secretarial functions and is headed by the Group CFO;
  • Channel, where Divisions can share best practice and develop mutually beneficial collaborative efforts;
  • Shared Services, which handles those activities identified by Channel that are more cost effective to share across Divisions; and
  • the four operating Divisions themselves.

Decentralised decision-making is given effect through a Group Executive Committee reporting to the Group CEO. The Committee’s members comprise the CEOs of Massmart’s four operating Divisions and a Group Executive from each of Massmart Holdings, Channel and Shared Services. Massmart Holdings Executives are also represented on each of the four Divisional Boards as non-executive Directors.

Massmart is a managed portfolio of four divisions, each focused on high-volume, low-margin, low-cost distribution of mainly branded consumer goods for cash, through 313 stores in 13 countries in sub-Saharan Africa.