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Managing the trade-offs that influence value creation

We believe that our responsibility goes beyond advocating for our customers by offering low prices and convenience, but also includes the positive impact we have on the environment and the communities they come from.

Massmart contributes significantly to society through employment, skills development, the development of businesses in our supply chain and our contribution to tax revenues in the regions where we operate.

We are aware of the competing interests of stakeholders and recognise the interdependence between the six capitals in creating shared value. Our values guide our decision-making and in this way allow us to optimise the trade-offs between resources and capitals.
The key material matters that impacted our ability to create value in 2017:
A CONSTRAINED consumer environment
The difficult consumer environment impacted Massmart’s ability to grow sales and therefore demanded an intense focus on expense management. In 2017 employment costs (the Group’s biggest cost category) were held to an increase of 0.5% from a combination of better staff scheduling in-stores and DCs, as well as selective replacement of vacancies. While the maintenance of full-time employee equivalents (FTE) had a positive impact on our financial capital, it has adversely affected our human capital.
Financial Capital
Human Capital
Potential for economic and political progress
In 2017, policy uncertainty resulted in the devaluation of the Rand and a credit ratings downgrade. The unfavourable impact on sales in discretionary product categories, such as General Merchandise and Home Improvement, has been notable. This decrease in social and relationship capital has resulted in a decrease in the financial capital available to us.
Financial capital
Social and relationship Capital
digitalisation of business
As digitalisation of businesses continues to gain momentum globally and customers increasingly expect a seamless omnichannel experience, a financial investment in skills and systems is required. This investment will have a positive impact on our human and intellectual capital.
human and intellectual capital
financial capital
Building strong teams
Securing retail talent is becoming increasingly competitive and costly and is a major focus in order to enable Massmart’s continued success. Identifying, developing and retaining top retail talent comes at an increased cost thus decreasing financial capital while resulting in an increase in human capital.
Human capital
Financial capital
Transformation and BBBEE
Continued focus on the transformation of our workforce, at all levels, as well as broadening our supplier pool can ensure that we build a diverse organisation that mirrors the customers and communities we serve. Our investment in our transformation efforts will result in the development of trusted relationships, as well as give us better access to our business-to-business (B2B) customers. This will require a financial investment from Massmart but will improve social capital in the long-run.
social and relationship Capital
financial Capital
Calculating the value we added: