Merchandise proposition:
Food Wholesaler, Retailer and buying association
 
73
Wholesale stores
(75 stores in 2013)
47
Retail stores
(47 stores in 2013)
12,863
full-time employees
(12,238 in 2013)
 
5
Wholesale BBBEE score
(Level 5 in 2013)
8
Retail BBBEE score
Cambridge Food’s first assessment
 
2-5
Wholesale
2-6
Retail
 
Geographic presence:
South Africa, Botswana, Lesotho, Mozambique, Namibia, Swaziland
Masscash consists of a Wholesale Division with cash and carry food and cosmetics’ businesses, and a Retail Division which consists of food outlets which target the lower LSM groups. Our Wholesale Division consists of CBW, Jumbo Cash and Carry, Trident and Shield.
CBW and Trident wholesale food, liquor, groceries and cosmetics in bulk to independent dealers, Government feeding schemes, franchise members, small traders and hawkers in peri-urban and rural areas within southern Africa. Jumbo sells mainly cosmetics, toiletries and hair-care products to individual customers and independent general dealers. Shield is a voluntary buying association that buys products in bulk on behalf of 523 members who own wholesale or retail businesses in South Africa, Botswana, Namibia and Swaziland.
Cambridge sell a hand-picked range of high-quality national brands, plus goods that they source and pack themselves under their own brand label, across all major categories.
 
Value proposition
Masscash Wholesale offers wholesale customers the ability to trade under national retail brands such as Saverite, Multisave, Powersave Liquorland and Club 10 Taverns. Our marketing team offers support to these supermarkets and bottle stores, assisting owners with marketing initiatives such as designing of leaflets, signage and implementing national television and radio advertising campaigns.
On the retail side, outlets are consolidated under the Cambridge Food or Rhino brands. Cambridge Food’s mission is to help its customers save money every day so that they can live better. Food Retail service departments, consisting of an on-site bakery, butchery and fresh fruit and vegetable offering form an important component of our Cambridge Food retail offering.
 
Highlights
  • Wholesale
  • 11% growth of Retail franchise outlets
  • Successful product range extension to fruit, vegetables and meat; enabling customers a wider choice and increased convenience
  • Retail
  • Improved store-opening processes, delivered three successful store openings with Cambridge Evaton achieving the biggest store opening to date
  • Successful rollout of new Private Label ranges
Improvements
  • Wholesale
  • Significantly improved Wholesale customer delivery processes, resulting in higher order fill rates, and improved customer satisfaction
  • Improvements in store standards and food safety; ensuring a better shopping experience
  • Retail
  • Improvement in profitability in both Gauteng and Kwazulu-Natal Retail regions
Challenges
  • Wholesale and Retail
  • Consumers have low disposable income
  • Higher inflation in Food and fuel
  • Weak job growth at lower-income levels
Financial performance
Sales
R27,840.4m
Up from R25,783.5m in 2013
23% Massdiscounters 27.6% Masswarehouse 13.8% Massbuild 35.6% Masscash
Trading profit before interest and tax
R299.1m
Up from R260.4m in 2013
8.8% Massdiscounters 50.6% Masswarehouse 26.1% Massbuild 14.5% Masscash
Key sales drivers
  • Food inflation, particularly commodities
  • Social grants
  • New stores
  • Rate of employment
Product inflation
4.8% 
4.2% in 2013
-2
stores
Total assets
R8,529.8m
decreased from R8,665.5 million in 2013.
Total liabilities
R7,882m
increased from R7,838.6 million in 2013
Net capital expenditure
R269.9m
Up by 40.0%
increased from R192.8 million in 2013.
Increase in trading space
0,3%
Trading area 400,775 m2
Trading area 399,637 m2 in 2013
DC space 36,654 m2
DC space 32,292 m2 in 2013

 

Divisional strategy

Wholesale

  • Re-organise buying structure
  • Optimise store portfolio
  • Improve Supply Chain and
  • Logistics capability
  • Focus on Saverite franchise

 

Retail

  • Grow profitable regions
  • Improve fresh food assortment
  • Roll-out single platform on SAP
Future outlook

Wholesale
We anticipate a continuation of the aggressive trading from the corporate food retailers serving the low-income customer but are cautiously optimistic about our growth over the next year. The LSM 2-6 market remains highly fragmented. Masscash is well positioned to offer new retail formats and to expand our current footprint to better supply food, cosmetics, liquor, cigarettes and cellular services to this market. To ensure future growth, we will expand the wholesale range to include meat, fruit and vegetables and grow the franchise formats and expand into southern Africa.

Retail
Cambridge Food has a solid store roll-out plan over the next two years, with an anticipated 10 new store openings in 2015 and 10 in 2016,
to strengthening its fresh operating model, to its roll-out of significant IT projects, and developing store management to provide leverage
for this future growth.

Investing in our community

Wholesale

Masscash Wholesale, through donations and active involvement, invested in education and nutrition initiatives during the year.
Building on our previous success, Masscash Wholesale donated a further 15 container kitchens to our school feeding initiative. The 79 kitchens provide a hygienic space for the preparation of meals for approximately 58,000 learners.
We support the inner city Day Care Centres in central Johannesburg, through the Metropolitan Evangelical Services. This ensures that young children have a safe place to go during the day. Furthermore young street adults can be rehabilitated and equipped with skills that will enable them to access the workplace.
We invested in literacy programmes allowing 1,086 scholars to enjoy access to a school library, donated to the Empumalanga Primary School in Motherwell, Eastern Cape.

Retail

  • R1.6 million donation of stock to Foodbank, a 16% increase over 2013.
  • Container kitchen donated to the Vosloorus community.
Investing in our human resources

Wholesale

The Group’s partnership with Impilo Wellness Programme provides healthcare support for 2,920 employees. It offers disease management strategies, psychological counselling, general well-being services, financial and legal support and trauma counselling.

Retail

Launched Gauteng Store of Learning to develop a pipeline of managers
KZN Store of Learning, placed 54 learners in 2014
Implemented first Cadet programme in Gauteng, seven learners achieved 13 distinctions in the first semester

Investing in our environment

Wholesale

We supported the KwaZulu-Natal Wildlands Food For Trees project. The project encourages unemployed adults and school learners to grow indigenous trees, and exchange them for food tokens from Wildlands. Over 35,000 trees were bartered and they are used for reforestation projects controlled by Wildlands.
A 3-year programme to upgrade all stores with energy efficient lighting is expected to reduce our energy consumption by 15%.

Retail

Variety of energy-saving measures implemented including skylights and LED lights
Multiplex refrigeration system, reduces electrical consumption and the heat exchange unit generates hot water for the store
Automated monitoring and adjusting of lighting levels to reduce electrical consumption
Alarms to minimise energy wastage on fridges
Passive ventilation system reduces dependence on air conditioning in-store

Wholesale Directorate

Guy Hayward Chairman, Neville Dunn Chief Executive Officer, Jane Bruyns Human Resources, Norman Gray Non-executive, Dino Holmes Financial,
Pearl Maphoshe Non-executive, Andrew Mardon Merchandise, Mike Spivey Non-executive, Robin Wright Non-executive, Johannes van Lierop Non-executive

Retail Directorate

Guy Hayward Chairman, Kevin Vyvyan-Day Chief Executive Officer, Bronwynne Bester Human Resources, Norman Gray Non-executive, Chris Knight Regional Gauteng,
Eben Mare Financial, Mike Marshall Commercial, Mike Spivey Non-executive, Andrew Stein Marketing, Craig Surmon Regional KZN, Johannes van Lierop Non-executive