Back to top
Our business model
We use our business model to drive sustainable economic value for all our stakeholders. It relies on high-sales density formats, procurement scale and cost-effcient routes to market, to deliver on our purpose of saving our customers money so they can live better.
Inputs into our stock of capitals on 30 December 2019 from the value we were able to create in 2019 in the form of outputs and outcomes
Outputs
The outcome of the application of our business model over the short, medium and long term
Trade-offs and actions taken to enhance outcomes and protect the sustainability of the business
Financial capital
Turnaround plan objectives
  • R4,800.8 million in equity
  • R7.8 billion in funding facilities
  • R1,728.7 million in free cash flow
  • R2,951.5 million in equity
  • R11.2 billion in funding facilities
  • R2 288.8 million in free cash flow
  • 0.3% decline in total Group expenses
  • Delivered R1,172.7 million in Trading profit before interest and taxation
  • Stabilised the balance sheet and reduced interest bill despite R6.1 billion sales impact of Covid-19 lockdowns
  • All suppliers and associates paid on time and in full • Responsible cash management and management of capex preserved cash
  • Our focus on cash management during the Covid-19 pandemic protected our business and allowed us to responsibly meet our commitments to our associates and suppliers
Manufactured capital
Turnaround plan objectives
  • 1,625,265m2 total trading space
  • 443 Retail and Wholesale stores
  • 14 distribution centres and four large item depots
  • 373 click-and-collect points
  • Ability to innovate and develop an effective business strategy
  • Robust governance structures, which support ethical and effective leadership
  • Effective risk management and risk governance
  • Supply chain expertise
  • 114 Private Label products
  • Systems, processes, and software that make up our organisational capital
  • Three e-commerce sites
  • Group operating model restructured
  • DionWired closed, eight Masscash stores sold
  • Wholesale integration
  • Centres of excellence established
  • Supply chain optimisation under way
  • Game reset
  • Cost reset
  • 0.8% decrease in total trading space
  • 423 stores, down from 443 in December 2019
  • 14 distribution centres and four large item depots
  • 413 click-and-collect points
  • Robust and effective governance and risk management support delivery of Turnaround plan
  • Systems in place to meet ship-to-home customer requirement
  • 58.6% increase in online sales
  • 69.5% increase in click-and-collect sales
  • Group operating model enabled value delivery through a more efficient organisation and centralised teams
  • Wholesale integration created a single Wholesale team leveraging scale to reduce costs and enhance customer value
  • The Game reset achieved a 230bps GP margin uplift and market-leading growth in target categories
  • Supply chain optimisation has created procurement scale
  • Our cost reset unlocked R600 million in SG&A savings
  • During the lockdown period initially our e-commerce sites couldn’t handle the volume of online shoppers. We responded rapidly strengthening our foundational competencies and enhancing our last mile deliver capability
  • #2 share of retail website traffic in SA
  • Turnaround efforts stabilising the business and driving renewed financial health
  • The progress we have made with the integration of our business through the implementation of a Group operating model and the strong execution of our Turnaround plan has positioned Massmart for growth and to leverage its core strengths
Human, social and relationship capital
Turnaround plan objectives
  • Skilled associates who are aligned with our values and motivated to implement our Turnaround plan
  • Our ability to implement our business strategy
  • Investment in skills training and leadership development
  • Health and safety programme in place to keep our associates and customers safe
  • Customer loyalty based on our ability to deliver on our purpose of saving our customers money so they can live better
  • Our commitment to responsible business and responsible sourcing
  • Strong relationships with our key suppliers and service providers
  • Good community relationships
  • CSI contributing to increased food security, early childhood development and reduced inequalities
  • Level 4 contributor BBBEE status
  • Associates and suppliers paid on time and in full
  • Reorganised leadership team
  • Appointed Head of e-commerce and Chief Supply Chain Officer (Walmart experts)
  • R132 million Covid-19 costs for deep cleaning and sanitising to keep our associates and customers safe
  • Roll out of Happy to Help and launch of Centres of Excellence
  • Maintained Level 4 contributor BBBEE status with highest score achieved by a JSE-listed retailer
  • Partnership approach to suppliers results in access to stocks during a period of stock shortages
  • Increased contribution to community members in need through our donation of an additional 500 tonnes approximately of food countrywide
  • Good response to a culture survey in which our associates told us they believed in our Turnaround plan
  • Increased leadership strength in key areas of e-commerce and supply chain
  • Improved customer experience resulted in 72.9% unique customer growth across Massmart banners in 2020
  • Everyday low price proposition is saving our customers money so they can live better
  • The improvement in our BBBEE performance reflects our commitment to responsible business
  • Our partnerships with suppliers ensured that we had access to stocks when there were shortages during lockdown and we could renegotiate vendor payment terms to preserve cash while taking care of our most vulnerable small suppliers
  • Our commitment to addressing food insecurity resulted in approximately 2 million meals provided to people in need
  • Through Powered by Walmart Massmart has access to expertise in key areas of our business
  • By providing NGOs with food supplies at cost and using our distribution centres to deliver this food countrywide we helped to ensure those in need and with no access to food were fed
Natural capital
Turnaround plan objectives
  • The reduction of our impact, and that of our customers, on the environment through increased recycling, reduction of waste to landfill, water use efficiency, climate change mitigation and adaptation, sustainable sourcing and product screening
  • Overall diversion rate of 55% for waste diverted from landfill
  • Municipal water consumption reduced by approximately 25 million litres
  • 9 solar plants installed producing 6.2 million kWh/p.a. in renewable energy
  • 14% reduction in our South African store energy intensity year-on-year
  • 22 canned, fresh and frozen seafood samples submitted for DNA analysis to ensure responsible sourcing
  • 92% of our Private Label packaging is recyclable and our aim is to have all our Private Label packaging recyclable by 2025
  • Improved monitoring and energy efficiencies reduced utility costs and GHG emissions
  • Increased use of renewable energy is reducing our reliance on fossil fuels
  • Our efforts to provide our clients with watersaving devices and products that reduce our customers’ environmental footprint are not only in line with our purpose to save our customers money so they can live better, but they are also environmentally responsible
  • By integrating Walmart’s global knowledge with Massmart’s understanding of our local environment, we ensure that our programmes are not only locally relevant they also achieve the maximum benefit and impact for Massmart and its stakeholders