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Divisional Reviews

Masscash

Masscash consists of Wholesale with Cash & Carry Food, cosmetics and Buying Association businesses; and Retail, which comprises Food outlets targeting lower LSM groups. Our Wholesale business includes the brands CBW, Jumbo Cash & Carry, Sunshine, Trident, Eureka, Saverite and Shield (a voluntary buying association); while the Retail business consists of the Cambridge Food and the Rhino Cash & Carry brands.
Our progress during the year
  • Appointed experienced leaders into key vacancies with a focus on driving strategic clarity, alignment and a sense of urgency to deliver results
  • Strong Wholesale performance through increased focus on known value items, in-stocks and alignment between merchants and operations
  • Strong rest of Africa performance
  • Improved working capital through an active reduction of aged/obsolete and secondary inventory and improved collection of debtors.
The challenges we faced
  • The challenging South African economy continued to result in poor consumer confidence, negatively impacting sales performance
  • Social unrest across South Africa had a significant impact on our customer base resulting in declining sales
  • Municipal service delivery protests (amongst others) resulted in lost trading hours in many stores
  • Increased inventory shrink and waste resulted in material write-offs during the year
  • The lack of systems integration following the organisational restructure in 2018 continued to pose significant operating and financial reporting challenges.
Our strategic focus going forward
  • Ensure the successful integration of the Masscash division into the Massmart Wholesale and Retail business units under the evolved operating model
  • Ensure sales growth is supported with sustainable margin growth
  • Drive profitable sales through increased volumes, basket mix and better margin management
  • Deepen the clarity of the retail strategy and ensure our Fresh departments remain a strategic differentiator
  • Continue our focus on the Wholesale stores by driving profitable sales, maintaining in-stock service levels and restoring credibility with customers and relevance with suppliers
  • Portfolio assessment with robust reviews of loss-making stores across both the Wholesale and Retail businesses
  • Delivery of an ERP system and improved IT infrastructure
  • Maintain an unwavering culture of risk and compliance, ethical conduct and good corporate governance.
Future outlook
We anticipate a further difficult sales environment in 2020, with South African retail and wholesale consumer confidence remaining low. We are, however, confident that Massmart’s evolved operating model and improved execution capability will manifest in improved financial results.
2019 strategy
Define and develop a hybrid store format for rest of Africa supported by site acquisitions
Continue our focus on the Wholesale stores by driving profitable sales, maintaining in-stock service levels and restoring credibility with customers and suppliers
Continue with the conversion of Rhino stores to Cambridge Food stores
Continue the VAS rollout in both Retail and Wholesale stores
Expand our Private Label sales penetration to improve competitiveness
Ensure our Fresh departments remain a strategic differentiator in our Retail stores