Integrated Annual Report
for the year ended December 2019
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Divisional Reviews

Masswarehouse

Masswarehouse comprises Makro, The Fruitspot and Wumdrop. Makro sells Food, Liquor and General Merchandise, catering for retail, commercial and wholesale customers. The Fruitspot is a Wholesaler and distributor of fresh and cut fruit and vegetables in Gauteng, KwaZulu-Natal and the Western Cape. Wumdrop is a South African company that provides crowd-sourced final mile delivery services to individuals and corporates.
Our progress during the year
  • Successfully opened our 22nd store in Cornubia (north of Durban) in March 2019
  • Launched our new ecommerce website, running off the SAP Hybris platform, resulting in robust sales performance over Black Friday
  • Launched Check out With Me mobile point of sale devices and dedicated checkout lanes to reduce wait times and improve in-store customer experience
  • Implemented the use of industry-leading analytics on customer shopping behaviour and launched customer growth strategies leveraging our strong customer dataset.
The challenges we faced
  • Constrained consumer demand, particularly for Durable Goods, driven by economic and political uncertainty in South Africa
  • Continued deflation in key categories, including General Merchandise, which negatively affected turnover
  • Increased load-shedding, impacting both our operations and the ability of our customers to operate their businesses
  • The incomplete national road infrastructure in the vicinity of our Riversands store (north of Johannesburg) continued to impact this store’s performance
  • Challenges experienced with stabilising our new ecommerce website negatively impacting customers’ online fulfilment.
Our strategic focus going forward
  • Successfully implement our integration programme to merge with Shield and Masscash Cash & Carry to form the Massmart Wholesale business unit
  • Leverage our assets to position ourselves as the most attractive route to market for our suppliers, as we drive a compelling offer for Wholesale and Business-to-Business (B2B) customers
  • Continue to grow our market shares by offering a clear CVP comprising a combination of great value with EDLP proposition, excellent customer service, a compelling range and high product availability
  • With our continued focus on SAP Hybris ecommerce and fulfilment platforms; we will enhance our CVP for Retail and B2B customers by making it possible to shop with us in a true omnichannel manner. This will be supported by maturing fulfilment capabilities
  • Leverage Group procurement scale and supply chain efficiencies as we further protect our low-cost operating model.
Future outlook
We anticipate a difficult sales environment in 2020, driven by low consumer confidence and uncertain economic conditions. However, we remain focused on our mission of saving busy families and small businesses time and money so that they can live better lives and run better businesses. We will achieve this by offering our customers unique value on a curated assortment of exciting products that they can trust.
2019 strategy
Grow our market share in General Merchandise among retail and commercial customers and in Food and Liquor among retail and hospitality customers
Further develop and stabilise our SAP Hybris ecommerce and fulfilment platforms, to accelerate growth in ecommerce
Retain our focus on our customer value proposition (CVP) by improving our product assortment, delivering our Every Day Low Price (EDLP) proposition and improving customer experience across our channels
Leverage Massmart and Walmart procurement scale and supply chain efficiencies