Integrated Annual Report 2021
Integrated Annual Report 2021

2021: A year of unique challenges

The ongoing impact of Covid-19

Impact

  • In accordance with Government regulations, Liquor sales were prohibited for approximately 110 days of the trading year
  • An estimated R1.8 billion in lost Liquor sales and an estimated R193.0 million in lost sales margin during the reporting period for the total Group
  • Additional costs associated with ensuring a safe shopping and workplace environment for customers and associates amounted to R77.7 million
  • Government-supported Temporary Employment Relief Scheme (TERS) benefits and negotiated rental relief of R62.2 million were received during the reporting period

 

Our response

  • Strict adherence to our Covid-19 protocols and safety measures for all associates and customers
  • Implemented a hybrid work-from-home/office model for head office-based associates
  • Implementing mandatory vaccination protocols at our head office
  • Continued store-based education and enablement programmes
  • Allocated special paid leave to associates to receive their vaccinations
  • Assisted pensioners in rural areas to register on the electronic vaccination data system, and rolled out vaccination sites at selected stores for pensioners to get vaccinated
  • Rolled out mobile vaccine sites to our associates at selected stores in high density urban areas
  • Offered emotional and psychological support to all associates through Massmart’s wellness programme

 

 

 

 

 

Civil unrest

In July 2021, KwaZulu-Natal (KZN) and parts of Gauteng in South Africa experienced civil unrest, which directly impacted 43 of our stores and two of our DCs. Of these, 34 stores had re-opened by the end of this financial year, while some of the remaining facilities will only re-open in 2022, due to the extensive damage they sustained (including the Makro Pietermaritzburg store which was destroyed by arson). The severe impact of the loss of our Riverhorse DC in KZN, which was also destroyed by arson, was offset by a shift of replenishment capabilities into other distribution facilities. As part of the reconfiguration of our logistics network, a new distribution facility in Gauteng was also brought online in September, months earlier than originally planned.

Impact

  • Lost sales due to store closures estimated at R2.7 billion, with an estimated lost sales margin impact of R473.1 million for the total Group
  • Damages incurred from the civil unrest for inventory written-off, assets impaired and other related damages amounted to R1.5 billion
  • Insurance proceeds of R1.0 billion received/ receivable (R171.2 million related to third-party liabilities) and an additional R100.0 million related to business interruption
  • During and following the unrest vulnerable communities experienced food insecurity

 

Our response

  • Together with Walmart, we contributed R13 million to mitigate food insecurity in vulnerable communities
  • Supplied in excess of 200 tonnes of food to FoodForward SA and the Gift of the Givers Foundation
  • We distributed 8,373 care packages to all our associates based in KZN. Each care package contained 29 basic household items
  • Our Logistics team packed and transported these care packages over the weekend of the civil unrest
  • WumDrop delivered these packages to worksites
  • Where it was safe to do so, we opened stores early to assist associates to shop and then opened to the public
  • We provided special paid leave to our associates who could not get to work and we allocated associates to other sites who worked in stores that needed to be rebuilt after the unrest

 

Read more detail on our performance

 

Strike action

The South African Commercial, Catering and Allied Workers Union (SACCAWU) declared a dispute with regard to some of the initiatives of our Turnaround plan. This resulted in two strikes: one lasting three days in May 2021, which ended even though no resolution was achieved; and an 18-day strike during November and December 2021. The 18-day strike concluded with the parties reaching an agreement on several issues and, more importantly, committing to engage in a relationship building process during 2022.

Impact

  • Negative social media
  • 29% of all our unionised associates participated in the 18-day strike
  • Additional costs incurred associated with increased security and contractors

 

Our response

  • Continued focus on restoring our relationship with SACCAWU
  • Continued dedication to creating a better world of work for our associates through our people policies and practices, which resulted in us being accredited a Top Employer in South Africa for 2022
  • Continued associate engagement and learnings implementing of learnings from these engagements and our BUA associate engagement survey

 


Read more detail on our people