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