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Our business model
Our business model is built on high-sales density formats, procurement scale and cost-efficient routes to market. As a result, we are able to optimise supplier distribution and obtain price leadership, which enables us to deliver on our commitment to save our customers money so they can live better. Our merchandise is made available through our network of 443 retail and wholesale stores across 13 countries.
How we drive value
CENTRALISED SUPPORT SERVICES
Centralised support services to all our divisions including technology development, human resource management, general management, procurement, planning and finance.
STRATEGIC RELATIONSHIPS WITH SUPPLIERS
Strategic relationships with suppliers to leverage bargaining power through Group collaboration, our exceptional partnerships with suppliers and working closely with them to achieve our low-cost promise, assortment optimisation, Private Label, merchandising, product placement and space allocation.
EFFICIENT SUPPLY CHAIN
Efficient supply chain through Group-wide transport, logistics, planning and storage ensuring high fulfilment and reduced inventory days that optimise inventory service levels.
OMNICHANNEL OFFERING
Omnichannel offering providing cost savings and improved experience and service for our customers.
EFFECTIVE MARKETING AND SALES
Effective marketing and sales through competitive pricing, promotional activity, assortment of products, communication and channel management.
SKILLED ASSOCIATES
Skilled associates commitment and ability ensures we have the strong teams and empowered leaders that are core to our aim to build the strongest and healthiest retail group, with the best long-term prospects in Africa.
Output
R93.7 billion
in low-cost, high-volume merchandise distributed through our widely-recognised, differentiated retail and wholesale formats sold in 443 stores in 13 countries.
How we make money
PROFIT FORMULA

Our profit formula is to reduce expenses and negotiate the best possible everyday low-cost price with suppliers. This frees up cash, which we invest in everyday low prices for our customers. By doing this our customers save money, the demand for our product increases, we grow sales and reinvest the money back into our business.

Our revenue differentiators:

  • Working closely with key suppliers to ensure a competitive product assortment
  • Private Label to offer customers good quality products at everyday low prices
  • Improving customer convenience by driving Value-Added Services (VAS) customer offerings
  • Maintaining a competitive price-gap against our major competitors across Known Value Items (KVIs)
  • Leveraging Walmart’s expertise and relationships
  • Investing further in customers’ online and omnichannel experience
OUR REVENUES

Our revenue is generated from the sale of Food and Liquor, Durable Goods including Home Improvement and VAS products sold across our network of stores.

R93.7 billion

2018: R90.9 billion

Group Sales
'19
'18
Food & Liquor
55%
56%
Durable Goods
43%
44%
Product Revenue Mix
'19
'18
Food & Liquor
57%
56%
Home Improvement
15%
15%
General merchandise
28%
29%
OUR COSTS

Our cost differentiators:

  • Leveraging Group collaboration to ensure effective product sourcing and an efficient supply chain
  • Centralisation of Group services where possible
  • Establishing multi-tenanted distribution centres (DCs) and focusing on final mile logistics efficiencies
  • Reducing capital expenditure
  • Optimising store space and reducing in-store operating costs
  • Driving structurally lower operating costs
  • Increased focus on working capital management
  • Increased IT costs to ensure we have systems to support our growth, innovation and to address cyber security
Group total expense composition
'19
'18
Employment costs
47%
49%
Occupancy costs
22%
22%
Depreciation and amortisation
8%
7%
Other operating costs
23%
22%
How we create value for our stakeholders
For customers
We save our customers money by operating for less and maintaining a positive price-gap against competitors.
For suppliers
We build fair and transparent relationships, create supply chain efficiencies, where possible, and create export opportunities through our relationship with Walmart.
For associates
We strive to create a diverse and inclusive workplace, equip associates with skills and training and remunerate fairly and responsibly.
For investors
We endeavour to offer sustainably long-term returns for our investors and implemented a turnaround plan to achieve this.
For society
We impact society by advocating for responsible business practices, through investing in CSI and environmental programmes and committing to ethical business and good governance.