5 Questions with Riaz Gani, CEO, Kit Kat Group
80% of independent wholesalers operate as hybrid outlets in a variety of formats designed to reach traders and consumers at every level. Kit Kat started out as a single convenience outlet and expanded through cash and carry and express outlets, providing an interesting example of hyper-segmentation through various store formats within the channel. At the 2021 Ti Independent Trade Forum, Kit Kat Group CEO Riaz Gani shared more on how Kit Kat is winning through hyper-segmentation.
ABOUT KIT KAT GROUP
The Kit Kat Group is an independent, family-owned group of supermarkets and cash and carry stores located in Pretoria, Johannesburg and Limpopo. It trades in FMCG, building supplies and clothing, and has recently added fresh and pharmacy departments to its mix.
1 | How have your store formats evolved since Kit Kat was founded?
In 1953 we started off as a café in Pretoria. Twenty years later the same Kit Kat Café was expanded from an 80m2 store to 120m2 and converted to a self-service supermarket, the first of its kind in that area. In 1983 my late father understood the value of trying to achieve volume and scale in business and so we built our second store through which we were doing wholesaling to try to achieve more volume for better pricing. In 1989 we opened up another supermarket and in 1992 we launched our Kit Kat Cash & Carry model with the first cash and carry store being built in 1999. That 12,000m2 store now measures 20,000m2 following expansion over the years.
In 2015 we launched Kit Kat Express which has grown tremendously. In 2020 we saw the need for setting up an Express Cash & Carry, which is a scaled-down version of a cash and carry big box store format. Our current infrastructure sits at 6 Cash & Carry stores, 19 Express stores and 3 Express Cash & Carry stores. We have recently launched our newest model, the Kit Kat Market store in Marble Hall, Limpopo.
2 | What value does having so many formats add to your overall business mission?
As a business we have understood the benefits of our different formats in order to reach the shopper. Our cash and carry store offers a very wide range of products – 22,000 SKUs – offering unparalleled value for money as shoppers (whether retail shoppers or traders) can choose from various pack sizes or bulk. The wide varieties of product we have and our store being a ‘one-stop shop’ provides extra convenience to our shoppers. The Kit Kat Express stores are doing wonders for us in the communities we are trading in. The people love our stores and support us a lot and we in turn support them through our community initiatives.
3 | How has the Kit Kat e-commerce platform contributed to hyper-segmentation?
As a result of the COVID-19 pandemic and our general fast-paced lifestyles we noticed the need for our business to pursue e-commerce through our Kit Kat online store. We understand that any brick and mortar store should establish an e-commerce presence to survive in current times and that is what we are doing. We believe that there is still a need for physical stores, regardless. As a business we pride ourselves in offering both formats to our shoppers as we are constantly striving to give them convenience and choice.
Some people state that South Africa is not e-commerce friendly. Our mentality as a business is to never sell our customers short – sometimes you don’t know what they want. Our job is to provide our customers with every single format aligned to selling product and then let the customer choose. The e-commerce part of our business is definitely growing and becoming more sophisticated. In 2022 we will be introducing a new IT system that will help with making it easier and more user-friendly for our customers. There is definitely uptake as far as e-commerce is concerned.
4 | What is your view on collaborations and partnerships, and does that support hyper-segmentation within your business?
Kit Kat trades predominantly in FMCG, building materials and clothing. In an effort to expand our current offering, we have just launched the ‘fresh’ part of our business which is a partnership with Food Lover’s Market. We have also launched in-store pharmacies and clinics in partnership with Kalapeng Pharmacies. From a Group perspective, we seem to think we have all the various categories to represent ourselves in the marketplace to make it convenient for our customer.
5 | What are Kit Kat's future goals over the short to medium term?
In our Express stores we plan to introduce a cashless payment solution/machine. What this entails is that the shopper will load their money into the machine and then receive change back. The cashier will scan the products and off you go, much like what we do for parking at shopping centres. We have implemented a measured approach by introducing six of these cashless payment solutions/machines in store and we are monitoring their success.
All the new divisions (Food Lover’s Market and Kalapeng Pharmacies) we have launched in our new stores will be added to our existing cash and carry stores and we will also link e-commerce to these stores. We also plan to introduce a loyalty card programme. Every single store will do deliveries to our customers. We want to make sure we get products to our customers as fast as possible as we focus on the last mile from an e-commerce perspective and using the brick and mortar stores as fulfilment centres.
For detailed insights into the Kit Kat group, Trade Intelligence is excited to announce a brand new independent trade profile report on the Kit Kat Group! Click here for more information or contact Shelley van Heerden on +27 (31) 303 2803 | shelley@tradeintelligence.co.za