Massmart on growth trail

The group, which has four divisions — Massdiscounters, Masswarehouse, Massbuild and Masscash — hopes to turn its recent acquisition of Cambridge Foods into its fifth leg, CEO Grant Pattison said last week.

The group is Africa's third-largest distributor of consumer goods, and retails general merchandise and liquor and home-improvement equipment. It also wholesales basic foods.

Massmart acquired 51% of retail cash-and carry firm Cambridge Foods from December and, while it hardly touched the past six months' results, Pattison said it could become a R10bn division soon.

The division has 10 stores — six came with the purchase for cash — and turned over R1bn in the six months to December. Pattison said the large-format stores, open from 5am to 8pm, were near transport modes, and served commuters.

Syd Vianello said the move was an elegant way to capitalise on business division Masscash, with its 77 cash-and-carry stores in SA, Lesotho, Namibia and Botswana, and voluntary buying association Shield.

The Massdiscounters division houses 87-store general merchandise retail discounter Game, and trades in SA, Namibia, Botswana, Zambia, Uganda, Mozambique, Mauritius, Malawi, Tanzania, Nigeria, and Ghana, and six-store hi tech retailer Dion Wired.

Masswarehouse has 13 Makro warehouse stores in food, general merchandise and liquor in SA. Massbuild has 71 outlets in do-it-yourself, home improvement and builders' hardware, under the Builders Warehouse, Builders Express and Builders Trade Depot brands in SA.

Massmart has been seeking a fifth division to add to its portfolio. Now Pattison has hinted it may even look at a sixth division as he is not limiting its expansion.

Vianello said Masscash was a mature operation. The move into an offshoot area made sense. Food retail was a growth area, and it was possible to make money in that sector.

Source: Business Day

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