Massmart — fastmoving.co.za - Retail South Africa

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Introduction
Massmart is a managed portfolio of nine wholesale and retail chains, each focused on high volume, low margin, low cost distribution of mainly branded consumer goods for cash, in 13 countries in sub-Saharan Africa through four divisions comprising 235 stores, and one buying association serving 480 independent retailers and wholesalers.

The Group is the third largest distributor of consumer goods in Africa, the leading retailer of general merchandise, liquor and home improvement equipment and supplies, and the leading wholesaler of basic foods.

• Group Structure

• Store Numbers

Store Name	2005	2006	2007	2008 (forecast)
CBW	58	62	63
Jumbo	7	7	7
Makro	12	12	14
Game	61	70	79
Dion	11	10	8
Builders Warehouse	12	20	20
Builders Express		14	14
Builders Trade Depot		31	31
Shield
Total	161	226	236

• Group Sales

Group	2005	2006	2007 (forecast)	2008 (forecast)
Turnover (bn)	26	30.3
Headline Earnings (mn)	679	837

• Estimated Grocery Market Share

Chain	2005	2006	2007
Pick n’ Pay	24.2	24.3	23.8
Shoprite	22.9	24.2	23.8
Spar (SA)	15.2	15.3	14.9
Massmart	12.1	12.0	11.8
Metcash	11	11.1	10.9
Woolworths	8	8.5	9
Sub Total	93.4	95.4	94.2
Other	6.6	4.6	5.8

International
Massmart operates 24 stores in 12 countries in Africa. These 24 stores contribute 5% of the groups turnover. The group plans to open a further 55 stores trading in African countries such as Kenya, Uganda and Tanzania by 2010.

Group Strategy
Since its founding in 1990, Massmart has pursued a strategy of aggressive organic and acquisitive growth, mitigating risk through:

Adhering to product categories and business models in which the Group has proven expertise
Strict new store development and acquisition criteria
Effective integration practices
Conservative accounting and governance practices

Competitive advantage is sustained through strategic, market and operational focus in each of the chains enhanced by inter-chain collaboration in procurement, cost reduction, retail positioning and executive development. This approach results in higher returns and
cash flows than could otherwise be achieved. Significant investment is made in the attraction and retention of talented leaders, managers and functional experts whose remuneration is directly linked to group, divisional or chain performance.

	massmart-sales-ahead-of-expectations
	Retailer Massmart said on Monday that consistent sales growth, ahead of expectations across all divisions for the 26 weeks to 24 December 2006, increased its continuing sales by 16.4 percent to R18-billion, compared with 2005. Read More >>

	massdiscounters-gets-new-md
	Massmart (MSM) announced the appointment of Jan Potgieter as Managing Director of Massdiscounters with immediate effect. Read More >>

	massmart-profit-up-sees-slower-growth
	South African retailer Massmart lifted headline earnings per share by 31 percent to 335.6 cents for first half of its fiscal year but said on Thursday profit growth may be slower in the second half. Read More >>

	published_results_june07.pdf
	Total ongoing sales growth for the 52-week period was 16,2% and comparable stores sales growth was 12,5%. Massmart’s estimated inflation in the Group for the year is 4,9%, compromising 0,5% in General Merchandise, 8,1% in Food and Liquor and 6,5% in Home Improvement. The Group’s trading profit was depressed by R48,8 million in store opening costs (R38 million in 2006) and foreign exchange losses of R41,4 million (R33,3 million gain in 2006). Share buybacks during the year totalled R313,2 million (prior year: R148,3 million).

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