MASSDISCOUNTERS DIVISIONAL REVIEW
GENERAL MERCHANDISE DISCOUNTER AND FOOD RETAILER

MASSDISCOUNTERS
STORE PROGRESS

OPENING BALANCE
   

GAME

 
STORES OPENED 
GROBLERSDAL
KING WILLIAM’S TOWN
LEPHELALE
LICHTENBURG
MASERU
QUEENSTOWN
STELLENBOSCH
 
   
TOTAL STORES
DECEMBER 2012
   
OPENING BALANCE
   

DIONWIRED

 
STORE OPENED 
RUSTENBURG  
   
TOTAL STORES
DECEMBER 2012
   
Trading space m2 441,382
DC space m2 178,488

 

Financial performance

Sales
R8,422.1 million

Trading profit before tax
R449.6 million


Improving efficiencies


Investing in our human resources


Investing in our community

Now in its sixth year, Amalunchbox was born from the belief that "you can't teach a hungry child", and we work together with the Department of Education to make their national School Nutrition Programme
more effective.

HIGHLIGHTS

  • Sales growth of 7.7%
  • Game Africa and DionWired profits increasing well ahead of sales in both businesses
  • Increased Foodco stores to 27

KEY SALES DRIVERS

  • Product deflation
  • Price perception
  • Interest rates
  • Consumer confidence and disposable income
  • New stores
  • African economic recovery

  • 26 stores acquired 1 July 1998
  • Now 114 stores
  • Operating in: South Africa, Botswana, Ghana, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Tanzania, Uganda, Zambia
  • General merchandise, Food Retail and FMCG
  • LSM 5-10
 

  • 20 Dion stores acquired 31 May 1993
  • Dion stores rebranded to Game stores in 2000
  • Launched greenfield DionWired concept stores in 2006
  • Now 19 stores
  • Operating in SA
  • General merchandise
  • LSM 8-10

The Massdiscounters brands

Massdiscounters operates two retail formats: Game and DionWired. Game is a discount retailer of General Merchandise and predominantly non-perishable groceries for home, leisure and business use, operating throughout South Africa and in 13 major cities in sub-Saharan Africa. Traditionally Game has been a discounter of General Merchandise, but our format renewal, with the introduction of Foodco, has pushed the brand towards a multi-category format. We now have 100 Game stores in South Africa and 14 in Africa, bringing our total footprint to 114. We also have 19 DionWired stores, which sell middle- to upper-end electronics and appliances across South Africa.

At Game our positioning offers customers the widest range of branded products, at the best price, for a given set of product specifications. We ensure that customers are assured of the best value at every logical price point. The Game trading model is promotionally-driven, with five million copies of our weekly promotional leafl ets distributed in South Africa. By working closely with our suppliers and benchmarking ourselves against competitors, we are able to offer our customers well-priced products representing great value.

Currently 27 Game stores provide a food offering under the Foodco sub-brand, providing further everyday value to our customers. Over the next few years, we intend to roll out Foodco to most Game stores.

LiquorMart was included with the Foodco format renewal to complete our offering and increase foot traffic to our general merchandise stores. We now have 18 LiquorMart stores, which are performing in line with expectations.

DionWired’s product displays create an easy, exciting and interactive shopping experience, offering the latest in-home entertainment, computing, video and digital photographic equipment and appliances. DionWired sells complete technological solutions, often demonstrating the interconnectivity of the latest innovations and products in-store. The Tech experts manning our in-store Tech Smart service centres are on hand to offer the best advice and onsite repairs and services.

Although all our products are competitively priced, DionWired’s proposition is not founded on price alone. Our main proposition is to offer the widest range of some of the world’s leading and discerning brands such as Apple, Smeg, Miele, Marantz, Bose and Onkyo to the South African higher-end consumer.

Future outlook

Over the next financial year, Massdiscounters will focus on bedding down many of the changes implemented over the past three years. With seven Game stores to open in South Africa and three new DionWired stores, we expect our aggressive growth strategy to continue to take market share and deliver our low-cost, lowmargin, high-volume business model to more customers in a highly competitive retail sector.

At DionWired our focus on a unique customer experience, as well as our extensive bouquet of services, will differentiate the brand on a national basis as discerning customers seek value and solutions in their purchases.

At Game we will continue to seek out and introduce the world’s leading consumer brands alongside our aggressive roll-out of Private Label to ensure that we offer the range of products required to retain our customers in this challenging market.

The evolution of the Foodco brand will follow three phases as we grow scale and volumes and continue to seek opportunities in the planning, sourcing and distribution of fresh produce. We plan to open or convert 11 more Foodco stores in the next 12 months, bringing the total to 38 Foodco stores by December 2013.

 

READ MORE
More information on the divisional financial
performance can be found in:

LETTER TO STAKEHOLDERS
FINANCIAL DIRECTOR’S REVIEW

DEFINITION
LIVING STANDARDS MEASURE (LSM)

The South African Advertising Research Foundation (SAARF) Living Standards Measure (LSM) has become the most widely used segmentation tool in South Africa. It is a means of segmenting the South African market that cuts across race, gender, age or any other variable used to categorise people. Instead, it groups people according to their living standards.


  Grant Pattison Chairman, Robin Wright Acting Managing Director, Norman Drieselmann Chief Financial Officer, Richard Fuller Store Operations Director, John Hart IT Director and Logistics Director, Guy Hayward Non-executive Director, Richard Millson Marketing Director, Rogany Ramiah Human Resources Director, Mike Spivey Non-executive Director, Mark Turner Africa Director, Tyrone Vieira Merchandise Director, Ilan Zwarenstein Non-executive Director