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Masswarehouse

 

makro Fruitspot logo

 

Masswarehouse Brands

Masswarehouse, the founding entity of Massmart, operates 19 massive warehouse stores branded as Makro. These are situated in the large metropolitan centres in South Africa.

The Makro model is unusual in that it sells General Merchandise primarily to retail customers while much of its Food and Liquor is sold to wholesale customers, although increasingly retail customers are taking advantage of the low food prices afforded by the warehouse model. This blend gives the brand a robustness that enables it to trade comfortably through most economic cycles. The big-box warehouse club format with our no-frills approach keeps costs down and provides the platform for our high-volume, low-margin sales offering of quality branded merchandise.

Fruitspot is an established wholesaler and distributor of fresh and cut fruit and vegetables, and was bought by Makro in 2012.

For the year ended 29 December 2013

Total
Rm
Corporate
Rm
Massdiscounters
Rm
Masswarehouse
Rm
Massbuild
Rm
Masscash
Rm
Sales 72 263.4 16 740.6 19 675.1 9 583.6 26 264.1
Operating profit before interest and taxation 2 152.5 (37.9) 449.0 988.1 505.3 248.0
Trading profit before interest and taxation 2 145.4 366.6 990.2 507.6 281.0
Net finance (costs)/income (255.1) (349.6) 34.0 38.5 29.2 (7.2)
Operating profit before taxation 1 897.4 (387.5) 483.0 1 026.6 534.5 240.8
Trading profit before taxation 2 239.9 400.6 1 028.7 536.8 273.8
Inventory 10 115.5 12.6 3 647.2 2 618.2 1 597.0 2 240.4
Total assets 26 147.9 (2 614.7) 7718.3 7 166.8 5 212.0 8 665.5
Total liabilities 20 778.3 (6 027.7) 7522.2 6 587.8 4 857.4 7 838.6
Net capital expenditure 2 061.4 759.0 489.7 344.8 275.1 192.8
Depreciation and amortisation 731.1 33.9 256.4 145.4 121.2 174.2
Impairment losses 41.6 2.1 39.5
Non-cash items other than depreciation and impairment 138.0 458.0 23.3 (352.2) 13.6 (4.7)
Cash flow from operating activities 1 914.5 399.4 990.1 273.9 356.9 (105.8)
Cash flow from investing activities (2 306.3) (1 424.0) (490.6) (385.2) (275.2) 268.7
Cash flow from financing activities 293.0 819.4 (621.6) 209.3 1.4 (115.5)
Inventory days 63.7 109.3 59.2 92.3 35.2
Number of stores 376 143 19 92 122
Trading area (m2) 1 481 308 475 331 195 794 410 546 399 637
Trading area (m2) increase on Dec 2012 4.8% 7.7% 9.3% 3.7% 0.6%
Trading area (m2) increase on Dec 2012
(excluding re-measurements)
4.8% 6.5% 9.3% 5.8% -0.2%
Average trading area per store (m2) 3 940 3324 10 305 4 462 3 276
Distribution centre space (m2) 323 813 178 488 51 300 61 733 32 292
Distribution centre space (m2) increase on Dec 2012 11.4% 108.4% 3.2%
Number of full-time equivalents 37 554 403 12 870 4 929 8 882 10 470
Number of full-time equivalents increase on Dec 2012 4.2% 28.3% -6.5% 27.9% 9.9% 4.3%

 

  • The corporate column includes certain consolidation entries.
  • All intercompany transactions have been eliminated in the above results.
  • Trading profit before taxation is earnings before corporate net interest, asset impairments, BEE transaction IFRS 2 charges, foreign exchange movements, loss on disposal of business, and assets classified as held for sale.
  • Net capital expenditure is defined as capital expenditure less disposal proceeds.

 


Massmart’s year end has changed from the end of June to the end of December to align the group better with Walmart.

Makro’s Value Proposition

Makro’s offerings are tailor-made to fit a variety of customer needs across all our merchandising categories.

Our Food offering caters to wholesale shoppers ranging from informal traders and grocery store owners to hoteliers, restaurateurs, offices and schools. Wholesalers account for the bulk of Makro’s food sales and most shop during the week for the convenience of our wide range of good-value, quality consumables.  At weekends, our focus shifts to promoting good buys for retail food and grocery shoppers who can achieve substantial savings on their monthly household basket compared with other traditional food retail outlets.

Our Liquor offering also caters to both the retail and wholesale customer. Makro’s liquor outlets, immediately adjacent to our main stores, carry a range of standard and premium brands especially in wine, champagne, whisky and brandy. These products are sold at a low margin to maintain and grow our share of the market. At the same time we have maintained a strong presence in beer and budget brands for liquor wholesalers looking for good value.

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