MASSMART GROUP OBJECTIVES

OUR GROUP STRATEGY HAS BEEN TO:

  • Focus on Core Trading
  • Complete Acquisition and Integration
  • Continue Supply Chain Investment
  • Grow Food Retail
  • Expand Into Africa
  • Invest in Leadership, Transformation and Sustainability

STORES

SOUTH AFRICA 331
AFRICA 8
   

COUNTRIES

 
SOUTH AFRICA NAMIBIA
BOTSWANA NIGERIA
GHANA SWAZILAND
LESOTHO TANZANIA
MALAWI UGANDA
MOZAMBIQUE ZAMBIA

REVISED MEDIUM-TERM OBJECTIVES DEC 2012

  • Above market comparable sales
  • Extract return from investment in Food Retail
  • Extract returns from investment in supply chain
  • Implementation of Africa Food Retail strategy
  • Drive Supplier Development Fund investment in Manufacturing
  • Invest in Leadership depth

MAJOR POTENTIAL
RISK AREAS

  • Labour unrest
  • Insufficient progress with transformation at an Executive level
  • Economic volatility
  • Acquisition risk
  • Competitive intensity
  • Customer safety

STRATEGIC PROGRESS:

     

PERFORMANCE AGAINST TRANSACTION COMMITMENTS

  • Total of 237 retrenched employees have accepted reinstatement; 73 took voluntary packages, 6 have retired or passed away and 187 did not present themselves for reinstatement.
  • Investment in new stores and infrastructure has led to the creation of 8,324 Full Time Equivalent (FTE) positions since the Walmart transaction, in line with the estimated creation of 15,000 new direct and indirect positions within a five-year period.
  • Food, Liquor and FMCG procurement has grown by R7 billion against an estimated increase of cumulative R60 billion also within five years, indicating we are on plan.
  • Massmart has established appropriate governance relating to the operations of the R240 million Supplier Development Fund (SDF), including the appointment of Executive Managers, an operational committee, an advisory committee consisting of Government, Trade Union, Trade Association and Company stakeholders, and an external auditor.
   

SUPPLY CHAIN INVESTMENT

  • R3-4 billion investments in systems and Distribution Centres (DCs). Currently:
    – 3 MDD Regional DCs
    – 3 Makro Regional Warehouses
    – 1 Cambridge DC
    – 1 Massbuild Central DC
    – Several meat, fruit, and vegetable supply facilities
  • Focus on attracting returns and improving efficiencies
 

FOOD RETAIL

  • Completed an initial investment in food retail (estimated R10 billion business). Currently, a four format approach:
    – Cambridge/Rhino (44)
    – Foodco (27)
    – Makro Retail (13)
    – Saverite (112)
  • Massfresh is focused on improving our offerings in meat, fruit, vegetables, deli and bakery
   

AFRICA EXPANSION

  • 3 Component Strategy:
    – City strategy – Game/ Builders Warehouse
    – Country strategy – South, West and East Africa
    – South African Development Community (SADC) strategy
       – new stores in Mozambique, Botswana and Zambia
  • Long-term potential in Africa
 

LEADERSHIP AND TRANSFORMATION

  • Level 4 BBBEE
  • 54 New Graduates
  • Continued investment in Executive Development
  • Established CEO Women’s Advisory
    Council
  • Leverage Walmart global talent pool