Integrated annual report
for 52 weeks ended 27 December 2015
Share -0.60%
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Manufactured capital

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, in 13 countries in sub-Saharan Africa, comprising 403 stores.
In 2015…
What we did well:
All Divisions reported positive sales volume growth and grew market share.

Three of the Divisions grew operating profit ahead of their own sales growth.

Our non-SA stores had strong second-half sales and profit performances.
New stores opened, including five outside South Africa, increased space by 4.2%.

Effective inventory management saw stock days of 63 at December 2015, better than 64 days a year earlier.

 

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MASSMART IS THE SECOND-LARGEST DISTRIBUTOR OF CONSUMER GOODS IN AFRICA, THE LARGEST RETAILER OF GENERAL MERCHANDISE, LIQUOR, HOME IMPROVEMENTS AND BUILDING SUPPLIES AND THE LEADING FOOD WHOLESALER ON THE CONTINENT.
 

History of Massmart

Massmart was founded in 1990, beginning with six Makro stores.

The first Makro store, an international brand founded in the Netherlands in the 1960s, opened in 1971 in Germiston, Johannesburg. This heralded the arrival of the cash and carry retail format in South Africa. Over the next sixteen years, five more stores were opened in Gauteng and the Western Cape.

In 1989 a strategy to found a holding company, Massmart, was formulated. The vision was for Massmart to become a multi-format South African wholesale and retail Group, with Makro as the cornerstone.

Massmart’s growth story

Massmart embarked on an acquisition trail in the early 1990s. In 1992 it acquired 378 Shield members and a year later twenty Dion stores. Massmart acquired 14 CCW stores in 1998 and 26 Game stores in 1999, substantially growing its retail offering and footprint.

By 2000, Massmart’s annual sales had grown tenfold from R1.0 billion to R10.4 billion, and in July 2000 Massmart successfully listed on the JSE. Since listing, Massmart has continued to grow both organically and by acquisition.

Between 2001 and 2015 Massmart acquired six Jumbo stores, 22 Browns & Weirs stores, five Builders Warehouse stores, three De Lay Rey stores, 14 Servistar stores, 34 Federated Timbers stores, six Cambridge Food stores, three Buildrite stores, The Fruitspot and the Rhino Cash & Carry Group. Over time, the Company blended these businesses into its current retail offering and launched Masscash Retail and DionWired as new retail formats.

Massmart operates in 12 African countries outside of South Africa (Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Tanzania, Uganda, Zambia and Swaziland).

The Walmart partnership

In 2010 Walmart, the world’s largest retailer, made an offer to acquire a 51% stake in Massmart.

Massmart’s shareholders voted in favour of Walmart’s offer of R148 per share, paving the way for the South African regulatory authorities to approve the merger. The Competition Appeal Court granted formal approval in March 2012 and the transaction was legally effective in June 2011.

Massmart today

With headline earnings before foreign exchange movements (taxed) of R1.2 billion, Massmart today is the result of both organic growth and acquisitive growth. It is a top 40 listed company (by sales) and employs over 48,000 permanent and flexi-time staff across four operating Divisions: Massdiscounters; Masswarehouse; Massbuild; and Masscash.

Massmart is the second-largest distributor of consumer goods in Africa, the largest retailer of general merchandise, liquor, home improvements and building supplies and the leading food wholesaler on the continent.

 

Above left to right:
Massmart Head Office in Sunninghill, Johannesburg and Cambridge Newcastle.