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Monday Aug 18, 2014

Massmart sees pick-up in property renovations

While low-end consumers living in dense residential areas were not buying or building new houses, they were either renovating them or fixing them, Llewellyn Walters, the managing director of Massmart's Massbuild division, said on Friday.

After testing the market for a year, Massbuild, which launched its low-cost Builders Superstores last year, plans to open three more of the stores before the end of this year.

This will bring to eight the number of stores that will compete directly with the stores of Cashbuild and Spar's Build-It.

Under the banner of Massmart, which owns Makro, Game and DionWired among others, Massbuild also trades as Builders Warehouse, Builders Trade Depot and Builders Express.

'Once we are happy with the format and Builders Superstores' business model, we will aggressively roll out more stores,' Walters said. He said there was a lot of activity around home renovations in places like townships and highdensity residential areas was driven by ageing houses and new Reconstruction and Development Programme housing development.

'The government housing developments come as a basic house and homeowners are always trying to find ways to make these houses modern and stylish. Meanwhile, in more established areas people are looking to change this and that in their houses,' he said.

Despite low-end consumers being cash-strapped, most of the buying decisions when it came to home renovations and improvements were motivated by aspirations.

'There is always a market for aspirational consumers who even in hard times find ways to make their homes beautiful,' Walters said.

Massmart's parent company, Walmart, has approved the Builders Superstore format.

When Massmart opened the first Builders Superstore in November last year it said the stores would offer 'everything under one roof'.

Walters said Massmart's main advantage compared with its rivals was that it offered a wide variety of building materials and it had tried to make the store format softer than a normal hardware store.

Despite Walters feeling positive about Builders Superstore, Cashbuild and Build-It have made inroads in these communities with more than 400 stores between them.

Massmart had previously said it planned to open about 60 Builders Superstores within five years. Unlike Cashbuild and Build-It, about 30 percent of Builders Superstores' offering was do-it-yourself products, which Walters described as softer and more accommodative to a female shopper.

'We do have the core range such as bricks, cement, doors and roofs but we have made sure that our store has a soft touch that could attract a female shopper who nowadays is a key decision maker when it comes to homemaking.

'Our advantage is that we have good sourcing power and we have managed to diversify our products, creating an environment where customers can come in and buy everything from door handles, curtain rails, decorative items right up to the roof,' he said.

Retail analysts said competition in this market would be good for consumers as it would bring prices down.

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