Massmart A retailer of opportunity
Walmart are proving surprisingly chatty about their plans for Massmart, having, as you know, named a “fixer” from within their own ranks, Mitch Slape, to succeed Guy Hayward as CEO. Speaking at a Deutsche Bank-sponsored global consumer conference, Richard Mayfield, CFO of Walmart International, shared some of the thinking. “I think the first job is to trade the business well, but clearly, we’ll be reviewing the portfolio of businesses and the operating model. I think there is a lot of opportunity for efficiency and cost savings.” Much work has been done in the Massmart business on these themes over the past two to three years. The savings to which Mayfield refers are related to the often overlooked goods not for resale (GNFR), which can push costs up by +25%, and include consumables such as shopping bags and till slips, equipment like fridges and services such as IT support – areas where, in other words, the economies of scale possessed by a Walmart might come in handy.
Comment: The past two to three years at Massmart have been defined by a significant amount of ‘back-end’ work, focusing on cost control, organisational re-structure, streamlining supply chain infrastructure for margin and efficiency etc. We look forward to seeing the impact of this work and new leadership on the numbers – a strong Massmart business is a strong vote for our economy and FMCG industry.