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Our value creation story
How we create value
Who we are
The resources we rely on
Our strategy
Our revenues
Our costs
Massmart is an African retail group with General Merchandise, Liquor, Home Improvement and Food offerings.
Our competitive differentiation lies in our:
  • Ability to exceed expectations of value amongst the widest consumer market in sub-Saharan Africa
  • High sales density formats and cost-efficient routes to market which drive price leadership
  • Procurement scale, which optimises supplier distribution and price efficiencies
  • Exceptional partnerships and stakeholder loyalty enabling long-term relationships


  • Our loyal customer base – the heart of our business
  • Our employees – just under 48,500 full-time equivalents (FTEs) and an experienced leadership team
  • Our wide footprint
    • The 436 stores across our 13 sub-Saharan Africa markets
    • Our 18 DCs
    • Our increasing digital presence and the 261 unique customer collection points
  • Our effective merchandising and planning, which ensures we have the right products in the right place at optimum quantities and the right price
  • Our strong partnerships with our key suppliers and service providers
  • Our growing Group-wide transport, logistics, planning and storage capabilities


Our business model

Our areas of strategic focus remain unchanged:
Our revenues are generated from the sale of:
  • Food & Liquor
  • Durable Goods
  • Home Improvement
  • Value-Added Services (VAS)
Our key revenue differentiators are:
  • Working closely with key suppliers to ensure investment in areas of common interest
  • Private Label product development and innovation driving sales growth and product leadership
  • Developing new income streams like VAS
  • Maintaining a competitive price-gap against our major competitors across Known Value Items (KVIs)
  • Investing in online and omnichannel
Our costs comprise:
  • Employment costs
  • Occupancy costs
  • Depreciation and amortisation
  • Other operating costs – include the non-capital costs of upgrading our IT infrastructure and pre-opening costs
How we manage our costs:
  • Leveraging supply chain and logistics efficiencies
  • Reducing store construction costs
  • Optimising store space and reducing in-store operating costs
  • Favourable lease re-negotiation and improved management of municipal and energy costs
  • Effective scheduling of our store employees
  • Reduction of shrinkage through effective data management, education and tight store processes and standards


Chief Financial Officer’s review

What impacts our ability to create value
Our material matters
Our challenges
Our competitors
Our risks
Buying behaviour
The matters impacting our operating context are:
  • Constrained consumer environment
  • Economic volatility and political uncertainty
  • IT and digitisation of business
  • Talent availability
  • Transformation and BBBEE
  • Corporate accountability


Material matters

Our financial performance was negatively impacted by:
  • Game and Masscash restructure and relocation and continued distraction at Game
  • Commodities and Durable Goods deflation
  • VAT increase
  • Negative comparable sales in November and December 2018
  • Negative adjustments for inventory and cost of sales in Massfresh
  • Large market shares in a low-growth market
  • Retailers cutting costs to support price leadership
  • Expansion of footprint and focus on capturing more of the informal market
  • Increased Private Label participation as consumers seek more value
  • Expansion of express formats providing convenience shopping
  • Increased focus on loyalty programmes
  • Increased consolidation of players in the liquor and DIY markets


Our strategic priorities

Our top ten risks are:
  • Non-adherence to business model or inability to adapt our strategy to changing market conditions
  • Talent retention and succession
  • Threat of cyber security breach
  • Insufficient progress with transformation
  • Inability to innovate in response to a changing competitive landscape
  • Poor consumer environment impact on potential growth
  • Failure to address health and safety issues across our facilities
  • IT systems’ capability and capacity to support operations and future growth
  • Increase in cost of goods and operating expenses undermining our low-cost foundation
  • Inefficient or ineffective supply chain or a failure in the supply chain


Managing our risks

The key factors impacting consumer buying behaviour are:
  • Prolonged Commodities and Durables deflation
  • Adverse financial pressures experienced by lower- and middle-income consumers
  • More customers prioritising value – subsidisation and switching
  • Spending shifts between brands create opportunities to grow Private Label
  • Customers seeking convenience – ‘on-the-go’ shopping
  • Modernisation of retail in Africa
  • Cyclical nature of retail means that higher revenues and operating profits are expected in the second half of the year due to increased demand for our non-Food categories leading up to the Christmas holiday period