Massmart punts Cambridge to grow food business
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Massmart, though its operating division Masscash would expand its food business using Cambridge Food stores by catering to the lower end of the market, a move analysts say could pay dividends for the group in the future. Masscash retail director Jay Currie said the group would expand its food business through Cambridge Food stores situated in KZN, the Free State, North West and Gauteng – these will be focused on the bottom end of the market as this is where growth lies. Currie said Massmart aimed to acquire or open 100 new stores within the next five years, planning for average annual store sales of R100m. The group owns 22 stores under five regional brands – 8 of these are trading under the Cambridge Food brand currently and the balance will be rebranded by Christmas 2010. Currie says the stores are producing annualised sales of about R2.5bn and there are plans for a further 10-20 stores to begin trading in the next 12 months. Analyst Nino Frodema said the company could expect handsome dividends from the venture. In the last set of results, the Masscash division out-performed the other divisions with its revenue up 13.1%.