MAKRO
MASSMART
INTRODUCTION
STRATEGY
Makro continues to look for opportunities to expand its national footprint. It has secured sites for new stores in Polokwane, Nelspruit and Milnerton and plans to open these during the 2012 financial year. They are in discussions with developers in other areas including Durban North, Cape Town and Bloemfontein as well as exploring potential opportunities in Africa.
One of the key efficiency drives is to recover and entrench the wholesale advantage by taking control of its own inbound and internal supply chain rather than being dependent on supplier-managed supply chains.
Makro expect increasing inflation in food categories over the coming year and anticipate that consumer spending will remain under pressure. As a result, Makro will focus on remaining relevant to all customers by ensuring that the offering remains appealing in all aspects; Including new and innovative merchandise; providing easy-to-navigate stores and readily accessible stock; employ informed and professional sales staff; and guarantee a customercentric ethos.
One of the key efficiency drives is to recover and entrench the wholesale advantage by taking control of its own inbound and internal supply chain rather than being dependent on supplier-managed supply chains.
Makro expect increasing inflation in food categories over the coming year and anticipate that consumer spending will remain under pressure. As a result, Makro will focus on remaining relevant to all customers by ensuring that the offering remains appealing in all aspects; Including new and innovative merchandise; providing easy-to-navigate stores and readily accessible stock; employ informed and professional sales staff; and guarantee a customercentric ethos.
HISTORY
The Makro concept was formulated by a German academic, Dr Biesheim, who solicited the interest of a wealthy german family to form Metro a.g. (unrelated to the South African Metro). The founding family of Metro a.g. was a close business associate of the ventener van vlissingen family, who owned SHV, a hundred year old Dutch based coal trading company. SHV decided to open up similar stores, called Makro, in countries that did not compete with Metro. A cross shareholding agreement eliminated potential conflict. All Makro stores internationally (once spread across europe, South America, South Africa and Asia), operated on a similar format as the original concept developed in Germany and the Netherlands. In 1997 during re-structuring, the Makro stores in Europe were subsequently sold off by SHV to Metro a.g. SHV now only operates Makro's in South America (Argentina, Brazil, Columbia, Venezuela) and Asia (Thailand, Indonesia, Malaysia, Philippines and China
With Rennies as a 33% local partner, SHV founded Makro South Africa in 1971 with the opening of the Germiston store in Johannesburg. This became the first mass merchandiser and cash & carry operation in South Africa. It was also the first to make use of computerised inventory and stock control keeping track of sales and purchases with then state-of-the-art ibm technology.
Milnerton and Rossburgh opened in 1972 and 1973 respectively. In 1974 the Dutch management team, having failed to bring the business to profitability, was replaced by local management seconded by Rennies. Amalgam opened in 1977, the Pretoria west store in 1979 and ottery in 1987.
There were certain noteworthy in-store developments unique to this country. up until 1979, Makro had operated on a two tier card system whereby traders were issued with a general 'passport' affording them access to the entire store, while other customers made use of a non-food 'passport' giving them access to non-food and liquor merchandise only. From 1979 onwards, all customers were issued with one card affording them access to the entire store. The barrier between the food and non-food sections was maintained, as were the separate check-out facilities. These barriers were only removed in 1983.
In 1987, as a result of anti-apartheid political pressure, SHV sold its 2/3's share to Wooltru Ltd. In 1988 Mark Lamberti was appointed managing director and by mid 1989 he had appointed a new management team and formulated a strategy to found and grow Massmart, a multi format major wholesale and retail group of which Makro was the cornerstone. Wwith this strategy in mind, Lamberti convinced Wooltru to acquire the remaining 1/3 share from Rennies and Makro became a wholly owned subsidiary of the Wooltru Group until it was listed in 2000.
In 1996, Lamberti was appointed executive chairman of Massmart and from July 2003 CEO and deputy chairman of the board. At the end of June 2007 he relinquished his executive role to assume new responsibilities within the group. Grant Pattison, joined Massmart as executive assistant to the executive chairman in 1998. He has since held various positions in the group, including managing director of Mass Discounters and Masscash. He joined the executive committee in 2000 and the board in 2004, becoming deputy chief executive officer in 2005, chief executive officer designate in 2006, and chief executive officer on 1 July 2007.
During the nineties the new management team embarked on an expansion and refurbishment strategy which saw the Germiston store relocated to a new flagship store in Meadowdale, all existing stores comprehensively refurbished and three new stores opened in Springfield, Pietermaritzburg and Centurion by the end of 1991. The Woodmead store was opened in 1994, the same year in which amalgam was destroyed by fire and subsequently rebuilt in crown mines the following year. Port Elizabeth opened in 1996 and shortly before Strubens Valley opened in 2002, the Woodmead store was destroyed in a second fire and rebuilt in a record 6 months. A third fire, started by external contractors, occurred in 2004 leaving the new Strubens Valley store in ruins before being rebuilt in the same year. After these last two tragic events, Makro embarked on a comprehensive risk management process, which included the replacement of roof lining material in affected stores to reduce the risk of future destruction. A week before the re-opening of Strubens Valley, the Pretoria West store was also successfully relocated to a new site in Wonderboom. With the increase in residential development in Pretoria East an opportunity for another Makro store was identified and the Silver Lakes store was opened in october 2007.
In 2001, Makro introduced the SAP retail management system as well as the SAP datawarehouse, following the earlier introduction of the SAP financial module. Shortly after the SAP customer relationship management system followed. This technological leap once again positioned Makro at the leading edge of retail information management, exceedingly well placed to manage its operations, merchandise and customers.
On the release of Nelson Mandela from prison, SHV entered into negotiations to return to South Africa and purchased 25% of Massmart in 1994. This shareholding grew to 32% through various rights issues. The cordial shareholder relationship with SHV allowed an exchange of ideas between Makro South Africa and SHV's stores throughout the world, until the sale of their interest in Massmart to institutional, individual and management shareholders in 2004.
With Rennies as a 33% local partner, SHV founded Makro South Africa in 1971 with the opening of the Germiston store in Johannesburg. This became the first mass merchandiser and cash & carry operation in South Africa. It was also the first to make use of computerised inventory and stock control keeping track of sales and purchases with then state-of-the-art ibm technology.
Milnerton and Rossburgh opened in 1972 and 1973 respectively. In 1974 the Dutch management team, having failed to bring the business to profitability, was replaced by local management seconded by Rennies. Amalgam opened in 1977, the Pretoria west store in 1979 and ottery in 1987.
There were certain noteworthy in-store developments unique to this country. up until 1979, Makro had operated on a two tier card system whereby traders were issued with a general 'passport' affording them access to the entire store, while other customers made use of a non-food 'passport' giving them access to non-food and liquor merchandise only. From 1979 onwards, all customers were issued with one card affording them access to the entire store. The barrier between the food and non-food sections was maintained, as were the separate check-out facilities. These barriers were only removed in 1983.
In 1987, as a result of anti-apartheid political pressure, SHV sold its 2/3's share to Wooltru Ltd. In 1988 Mark Lamberti was appointed managing director and by mid 1989 he had appointed a new management team and formulated a strategy to found and grow Massmart, a multi format major wholesale and retail group of which Makro was the cornerstone. Wwith this strategy in mind, Lamberti convinced Wooltru to acquire the remaining 1/3 share from Rennies and Makro became a wholly owned subsidiary of the Wooltru Group until it was listed in 2000.
In 1996, Lamberti was appointed executive chairman of Massmart and from July 2003 CEO and deputy chairman of the board. At the end of June 2007 he relinquished his executive role to assume new responsibilities within the group. Grant Pattison, joined Massmart as executive assistant to the executive chairman in 1998. He has since held various positions in the group, including managing director of Mass Discounters and Masscash. He joined the executive committee in 2000 and the board in 2004, becoming deputy chief executive officer in 2005, chief executive officer designate in 2006, and chief executive officer on 1 July 2007.
During the nineties the new management team embarked on an expansion and refurbishment strategy which saw the Germiston store relocated to a new flagship store in Meadowdale, all existing stores comprehensively refurbished and three new stores opened in Springfield, Pietermaritzburg and Centurion by the end of 1991. The Woodmead store was opened in 1994, the same year in which amalgam was destroyed by fire and subsequently rebuilt in crown mines the following year. Port Elizabeth opened in 1996 and shortly before Strubens Valley opened in 2002, the Woodmead store was destroyed in a second fire and rebuilt in a record 6 months. A third fire, started by external contractors, occurred in 2004 leaving the new Strubens Valley store in ruins before being rebuilt in the same year. After these last two tragic events, Makro embarked on a comprehensive risk management process, which included the replacement of roof lining material in affected stores to reduce the risk of future destruction. A week before the re-opening of Strubens Valley, the Pretoria West store was also successfully relocated to a new site in Wonderboom. With the increase in residential development in Pretoria East an opportunity for another Makro store was identified and the Silver Lakes store was opened in october 2007.
In 2001, Makro introduced the SAP retail management system as well as the SAP datawarehouse, following the earlier introduction of the SAP financial module. Shortly after the SAP customer relationship management system followed. This technological leap once again positioned Makro at the leading edge of retail information management, exceedingly well placed to manage its operations, merchandise and customers.
On the release of Nelson Mandela from prison, SHV entered into negotiations to return to South Africa and purchased 25% of Massmart in 1994. This shareholding grew to 32% through various rights issues. The cordial shareholder relationship with SHV allowed an exchange of ideas between Makro South Africa and SHV's stores throughout the world, until the sale of their interest in Massmart to institutional, individual and management shareholders in 2004.
