Masswarehouse, the founding entity of Massmart, operates 19 massive warehouse stores branded as Makro. These are situated in the large metropolitan centres in South Africa.
The Makro model is unusual in that it sells General Merchandise primarily to retail customers while much of its Food and Liquor is sold to wholesale customers, although increasingly retail customers are taking advantage of the low food prices afforded by the warehouse model. This blend gives the brand a robustness that enables it to trade comfortably through most economic cycles. The big-box warehouse club format with our no-frills approach keeps costs down and provides the platform for our high-volume, low-margin sales offering of quality branded merchandise.
Fruitspot is an established wholesaler and distributor of fresh and cut fruit and vegetables, and was bought by Makro in 2012.
For the year ended 29 December 2013
|Sales||72 263.4||–||16 740.6||19 675.1||9 583.6||26 264.1|
|Operating profit before interest and taxation||2 152.5||(37.9)||449.0||988.1||505.3||248.0|
|Trading profit before interest and taxation||2 145.4||–||366.6||990.2||507.6||281.0|
|Net finance (costs)/income||(255.1)||(349.6)||34.0||38.5||29.2||(7.2)|
|Operating profit before taxation||1 897.4||(387.5)||483.0||1 026.6||534.5||240.8|
|Trading profit before taxation||2 239.9||–||400.6||1 028.7||536.8||273.8|
|Inventory||10 115.5||12.6||3 647.2||2 618.2||1 597.0||2 240.4|
|Total assets||26 147.9||(2 614.7)||7718.3||7 166.8||5 212.0||8 665.5|
|Total liabilities||20 778.3||(6 027.7)||7522.2||6 587.8||4 857.4||7 838.6|
|Net capital expenditure||2 061.4||759.0||489.7||344.8||275.1||192.8|
|Depreciation and amortisation||731.1||33.9||256.4||145.4||121.2||174.2|
|Non-cash items other than depreciation and impairment||138.0||458.0||23.3||(352.2)||13.6||(4.7)|
|Cash flow from operating activities||1 914.5||399.4||990.1||273.9||356.9||(105.8)|
|Cash flow from investing activities||(2 306.3)||(1 424.0)||(490.6)||(385.2)||(275.2)||268.7|
|Cash flow from financing activities||293.0||819.4||(621.6)||209.3||1.4||(115.5)|
|Number of stores||376||–||143||19||92||122|
|Trading area (m2)||1 481 308||–||475 331||195 794||410 546||399 637|
|Trading area (m2) increase on Dec 2012||4.8%||–||7.7%||9.3%||3.7%||0.6%|
|Trading area (m2) increase on Dec 2012
|Average trading area per store (m2)||3 940||–||3324||10 305||4 462||3 276|
|Distribution centre space (m2)||323 813||–||178 488||51 300||61 733||32 292|
|Distribution centre space (m2) increase on Dec 2012||11.4%||–||–||–||108.4%||3.2%|
|Number of full-time equivalents||37 554||403||12 870||4 929||8 882||10 470|
|Number of full-time equivalents increase on Dec 2012||4.2%||28.3%||-6.5%||27.9%||9.9%||4.3%|
- The corporate column includes certain consolidation entries.
- All intercompany transactions have been eliminated in the above results.
- Trading profit before taxation is earnings before corporate net interest, asset impairments, BEE transaction IFRS 2 charges, foreign exchange movements, loss on disposal of business, and assets classified as held for sale.
- Net capital expenditure is defined as capital expenditure less disposal proceeds.
Makro’s Value Proposition
Makro’s offerings are tailor-made to fit a variety of customer needs across all our merchandising categories.
Our Food offering caters to wholesale shoppers ranging from informal traders and grocery store owners to hoteliers, restaurateurs, offices and schools. Wholesalers account for the bulk of Makro’s food sales and most shop during the week for the convenience of our wide range of good-value, quality consumables. At weekends, our focus shifts to promoting good buys for retail food and grocery shoppers who can achieve substantial savings on their monthly household basket compared with other traditional food retail outlets.
Our Liquor offering also caters to both the retail and wholesale customer. Makro’s liquor outlets, immediately adjacent to our main stores, carry a range of standard and premium brands especially in wine, champagne, whisky and brandy. These products are sold at a low margin to maintain and grow our share of the market. At the same time we have maintained a strong presence in beer and budget brands for liquor wholesalers looking for good value.