Private Label Private Label Report Private Label Publication date: December 2018 Next publication: July 2019 Private Label Private Label Report Private Label

PRIVATE LABEL Private Brand Confined Label Exclusive Brand What is Private Label? Private brand, Dealer Own Brand and House brand: A brand of product(s) that is exclusively manufactured by a contract or third-party manufacturer for a retailer, according to retailer specifications, and sold under a retailer’s brand name. Private brand is often tiered according to ‘good, better, best’ brand positioning, however these tiers are defined differently across retailers i.e. some might refer to premium / national brand equivalent / value or fit for purpose Confined Label, Exclusive Brand: A brand of product(s) owned by a manufacturer or producer, however exclusive rights are given to a retailer as the sole distributor of the product to the market Let’s take you on a journey down the shopping aisles of Masscash Wholesale outlets, showcasing their most prominent private brand products

Masscash Wholesale Role of Private Label Private label brand excellence remains a Group focus for Massmart, evident in the ongoing innovation in product range, point of sale and packaging of private label brands The benefits of private label include: assisting in the implementation of pricing strategies; driving customer loyalty; creating and driving differentiation; increasing profitability; and within the broader Massmart Walmart Group, leveraging opportunities and collaboration with suppliers Going forward, the overall strategy for private label within Masscash Wholesale will be to focus on new product development and driving increased penetration across various categories. This is underpinned by a key plan on business structures and processes Contribution of private label For FY2017, private label made up 4.9% of sales within the wholesale business The Econo brand comprises 85% of total wholesale private label sales The Soda-T brand comprises 12% of total wholesale private label sales The Saverite brand makes up 1,4% of total wholesale private label sales “Private label underpins a retailer’s tactical position. We have some great brands that continue to do well for us.” Guy Hayward Massmart CEO

Masscash Wholesale Strategic Positioning Good quality range at an affordable price that satisfies consumers’ everyday needs Good (value) soft drink offering Private label range exclusively available to Saverite franchise stores Provides franchisees with a higher margin product range for increased competitiveness in the market Customer Profile LSM 2-6 Range/SKUs 986 SKUs across commodities, toiletries, general merchandise and grocery offering 16 SKUs 16 Variants 42 SKUs including commodities (e.g. sugar, flour and oil), non-perishables and household goods Price Positioning Value-for-money “price fighting” brand Value-price positioning Good quality, value-for-money products Offered at a lower price point than the market leaders Sales contribution (FY2017) 85% of total wholesale private label sales 4.1% of total Masscash Wholesale turnover 12% of total wholesale private label sales 13% of the total CSD category within Masscash Wholesale 1.4% of total wholesale private label sales

Econo The Econo brand was established more than 25 years ago and has since evolved to be a household brand name The brand offers a range of quality, affordable products including commodities, general merchandise, groceries, toiletries and service department items such as processed meats The Econo offering remains the largest private label brand within the Massmart Group and the biggest single brand on offer within the wholesale business It comprised 4.1% of total Masscash divisional sales to FY2017, generated from a total of 986 SKUs Econo comprises 85% of total wholesale private label sales and is the key brand driving private label success in the wholesale division The brand promise is to offer customers “value for money” and the assurance of “stringent quality and safety controls” as well as products from a trusted private label brand

Econo On-Shelf Econo has a strong on-shelf presence across wholesale stores, and is utilised to drive both topline sales and margin

Soda-T Soda-T is the private label carbonated soft drink offering within Masscash, with 16 SKUs Soda-T currently makes up 13% of the total CSD category within the wholesale business

Soda-T On-Shelf Soda-T is sold in singles as well as in 6-packs for Masscash bulk customers

Saverite Saverite stores stock both the Econo brand, as well as the Saverite private label offering As at FY2017 the Saverite private brand offering comprised 42 SKUs, primarily in the grocery category Category focus will continue to be on basic foods, as well as on household items such as paper-ware, and cleaning materials

Saverite On-Shelf

Maryla Masojada | Head Analyst Kate Shirley | Retail Analyst Tel: +27 (0) 31 303 2803 Fax: +27 (0) 31 303 4560 info@tradeintelligence.co.za Tel: +27 (0) 31 303 2803 Fax: +27 (0) 31 303 4560 info@tradeintelligence.co.za Tel: +27 (0) 31 303 2803 Fax: +27 (0) 31 303 4560 info@tradeintelligence.co.za Maryla Masojada | Lead Analyst Kate Shirley | Retail Analyst Kate Shirley | Retail Analyst – New Channels Maryla Masojada |Head Research Kate Shirley | Retail Analyst – New Channels Maryla Masojada |Head Research Kate Shirley | Retail Analyst – New Channels Maryla Masojada | Head Research tel +27 31 303 2803 fax +27 31 303 4560 info@tradeintelligence.co.za Disclaimer These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects. Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein. TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein. TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy. * TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence Disclaimer These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects. Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein. TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein. TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy. * TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence Disclaimer These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects. Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein. TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein. TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy. * TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence Disclaimer These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.   Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein. TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein. TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy. Disclaimer These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects. Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein. TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein. TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy. * TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence