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Masswarehouse

Masswarehouse comprises Makro, The Fruitspot and Wumdrop. Makro sells national and owned brands in the Food, Liquor and General Merchandise categories, catering for personal, commercial and trading customers. The Fruitspot is a wholesaler and distributor of fresh and cut fruit and vegetables in Gauteng, KwaZulu-Natal and the Western Cape. Wumdrop is a final-mile delivery service specialising in delivery of small to medium packages in partnership with independent drivers.
2017 Strategy
  • Grow market shares in Food & Liquor and General Merchandise
  • Offer a clear customer value proposition comprised of a combination of value, range and availability
  • Improve ecommerce offering through continued investment in customer fulfilment, increasing the commercial sales force and growing our inbound supply chain
  • Maintain our lowest cost operator model through process optimisation
Delivering on our strategy
Financial capital

On a 52-week basis:

  • Total sales growth of 4.0%, with comparable sales growth of 2.4%
  • Trading profit before interest and tax increased by 0.2%
  • Effective cost management resulted in total expense growth being below sales growth
  • Inventory days remained flat
Manufactured capital
  • Opened our 21st Makro store in Riversands, this store includes new merchandise layouts which have elicited great responses from customers
  • Enhanced mobile sales force technology, allowing sales representatives to serve customers and take orders on the road
  • Wumdrop on-demand fulfilment service incorporated into the Makro outbound delivery network
  • Opened a large-scale meat processing facility in Johannesburg, serving all Massmart Divisions as well as multiple third-party customers
  • Established The Fruitspot operations in Cape Town and Durban
Intellectual capital
  • 25% increase in Black Friday sales from extended promotion period, with Online sales increasing to over 15% of Makro sales on that day
  • Launched mCard mobile app, including the popular mRewards loyalty and rewards programme, which currently has almost 200,000 users
  • Launched Money Centres with the capability to service money transfers, prepaid utilities, bill payments, bus and Lotto tickets in all our stores nationwide
  • Winner of the Wholesaler category in the Sunday Times Shopper Survey 2017
Human capital
  • Cadet and Graduate Workplace Experience programmes help us build a strong talent pipeline, run in conjunction with the Wholesale and Retail SETA
  • Received accreditation from the Quality Council for Trades and Occupations (QCTO) for occupationally directed programmes and from UMALUSI to offer Adult Basic Education ABET level 4
Social and relationship capital
  • Procurement in excess of R50 million from seven SDP suppliers
  • Enrolled a further 25 early childhood development centres (ECD) through SUCCEED programme by Hope Worldwide. Makro now sponsors 170 ECD in eight provinces, supporting 4,000 learners
  • In partnership with Izzi Trust, Makro sponsored 396,000 meals to over 5,000 children
Natural capital
  • Makro now ensures that standard condensate harvesting technology, heat reclamation and thermal storage systems are in place in all new stories including the newly revamped Makro Springfield store
  • Recapture of condensate from air-conditioning and refrigeration units programme has saved more than one million litres of water, this is then reused in the cooling plants, to flush lavatories and water plants
2017 Highlights

On a 52-week basis:

  • Sales volumes grew as total sales growth of 4.0% exceeded inflation of 2.3%
  • Inventory days were at the same level as last year
  • Online sales grew by 37%
  • Trading space increased by 6.0% with the November opening of Makro Riversands
4.0%
Sales
R27,311.9 million
2016: R26,270.3 million
0.2%
Trading Profit
R1.256.6 million
2016: R1,251.3 million
21
Stores
2016: 20 stores
231,021m2
Total trading space
2016: 217,907 m2
Strategic focus for 2018
  • Accelerate investment in the strategic areas of ecommerce, analytics and fulfilment whilst managing costs in all other areas
  • Continue to reduce costs through process optimisation and the appropriate use of technology
  • Invest in our range so that we continue to meet our customers’ needs
  • Grow market share in retail and commercial segments
Future outlook

Makro remains focused on bringing the benefits of scale to all our customers. We will do this by offering products and brands that our customers know and trust, at prices that save them money so that they can live better and trade more profitably. Makro will continue to work on providing access to our proposition to all customers, and on building relevant and cost-effective fulfilment capability to support this. At The Fruitspot we will grow the business by ensuring it becomes a supplier of choice to the retail and hospitality industry, and in the Group.

2017 Management
Guy Hayward Non-Executive Chairman
Garry Hendry Merchandise: Food
Joe Ralebepa Non-Executive
Andrew Stein Marketing and Ecommerce
Doug Jones Chief Executive Officer
Jonathan Koff Merchandise: General Merchandise
Pieter Schoeman IT and Projects
Craig Stewart Operations and National Sales
Peter Arnold Massfresh Managing Director
Gert Lourens Store Development
Deepa Sita Finance
Johannes van Lierop Non-Executive
Dean Bauer Supply Chain
Kevin Maier Merchandise: Liquor