Divisional Operational Review


Comprises the 117-store General Merchandise discounter and Food retailer Game, which trades in South Africa, Botswana, Ghana, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Tanzania, Uganda and Zambia; and the 19-store Hi-tech retailer DionWired. Divisional comparable sales increased by 3.7% with product inflation of 0.5%, and total sales increased by 9.0%. Critically, Game South Africa’s comparable sales growth was only 1.0% which caused severe pressure on profitability and so Massdiscounters’ trading profit before interest and tax decreased by 39.6%. There was also cost pressure from the first-time R38.2 million costs of the third regional distribution centre which opened in Durban in July 2012. The roll-out of Dry Groceries and Fresh continues with 31 stores now offering Fresh, and Food sales growth in comparable stores is exceptionally strong. Game Africa and DionWired performed well, with operating profit increasing just below sales growth in both businesses. DionWired’s total sales growth was 23.7%. Game Africa’s total Rand sales and sales in local currencies increased by 16.0% and by 14.3% respectively. Three Game stores were opened, increasing space by 13,221 m² (3.0%).


Comprises the 19-store Makro warehouse-club trading in Food, General Merchandise and Liquor in South Africa; and Fruitspot.

Divisional comparable sales increased by 6.9% with product inflation of 2.6%, and total sales grew by 13.7%. Despite trading well in a very competitive environment, which came with some margin pressure, Makro’s trading profit before interest and tax decreased marginally by 0.9%. Whilst the new Alberton store, opened in April 2013, made a small positive net profit contribution, this does include R15.2 million of pre-opening costs.

One store was opened, increasing space by 12,550 m² (7.0%).


Comprises 80 stores, trading in DIY, Home Improvement and Building Materials, under the Builders Warehouse, Builders Express and Builders Trade Depot brands in South Africa and Botswana.

Divisional comparable sales increased by 9.0% with product inflation of 3.1%, and total sales increased by 9.0%. All three businesses traded very well but the cost-drag of approximately R19.7 million from the opening of the first Massbuild regional distribution centre in April 2013 caused trading profit before interest and tax to increase by only 1.7%. Builders Warehouse and Builders Express both grew operating profit ahead of sales growth, an exceptional performance in a tough market. Builders Trade Depot is being refocused to 20 larger stores supplying building materials and roof trusses, and it too grew operating profit well ahead of sales growth.

One Builders Warehouse store was opened; two Builders Express stores and three Builders Trade Depot stores were closed; and one Builders Trade Depot store was sold, resulting in net trading space decreasing by 10,496 m² (2.7%).


Comprises 80 Wholesale Cash and Carry and 44 Retail Cash and Carry stores trading in South Africa, Botswana, Lesotho, Mozambique, Namibia and Swaziland; and Shield, a voluntary buying association.

Divisional comparable sales increased by 4.2% with product inflation of 4.6%. Total sales increased by 5.6%, slightly bolstered by the Rhino acquisition in March 2012. Margin pressure was intense in the Wholesale business as the now independently owned ex-Metro stores fought for market share. Despite good cost control, the Masscash trading profit before interest and tax decreased by 13.5%. We opened our first Mozambique wholesale store in Xai Xai in April 2013 and are seeing positive trading trends. Following the successful roll-out of a new in-store IT system in our Johannesburg stores and distribution centre during this period, the Retail business now operates off one common IT platform. With this distraction behind us, we can focus on same-store and new-store sales growth and improving profitability.

One Retail store and one Wholesale store were opened and one Retail store was closed. Net trading space increased by 6,777 m² (1.7%).

  26 weeks    26 weeks          26 weeks   
Rm  June 
% of 
% of 

% sales 
% sales 
% of 
Sales  32,369.4    29,716.9    8.9  5.5  2.9  36,122.6   
Massdiscounters  7,618.1    6,986.5    9.0  3.7  0.5  8,422.1   
Masswarehouse  8,608.9    7,570.7    13.7  6.9  2.6  9,630.2   
Massbuild  4,246.9    3,897.9    9.0  9.0  3.1  4,663.1   
Masscash  11,895.5    11,261.8    5.6  4.2  4.6  13,407.2   
Trading profit before                  
interest and tax  814.9  2.5  929.6  3.1  (12.3)     1,427.1  4.0 
Massdiscounters  151.8  2.0  251.5  3.6  (39.6)     426.5  5.1 
Masswarehouse  394.7  4.6  398.3  5.3  (0.9)     518.1  5.4 
Massbuild  176.9  4.2  174.0  4.5  1.7      271.0  5.8 
Masscash  91.5  0.8  105.8  0.9  (13.5)     211.5  1.6 

Trading profit excludes several items. A detailed reconciliation between trading and operating profit can be found here.