Point of Purchase Execution Report Publication date: June 2019 Next publication: May 2020 Point of Purchase Execution Report

Ti School of Retail | In-store Execution Excellence Point of Purchase Execution Ranging and merchandising Wider aisles and clear directional signage allows for ease of navigation for both shoppers and staff packing the shelves Centralized buying allows supplier operations to influence purchasing Ti School of Retail | In-store Execution Excellence Geared for primary & secondary shopper Dump bins lining action alley Page 2

Point of Purchase Execution Focus Categories The food range in Makro aims to increase foot traffic, basket size, and attract new shoppers Makro is committed to improving the offering by growing targeted categories and enhancing the value proposition of bringing convenience and affordability to local households and businesses Food and fresh offering increasing shopper visits and basket size Food ‘Food reduces the cyclicality of the stores, and increases the frequency and customer types to the stores.’ Guy Hayward Massmart CEO General Merchandise Health & Beauty Baby The expansion of fresh food in Makro builds on the existing general merchandise and wholesale platforms. The intention behind the addition of retail food is to: Reduce the cyclical nature of the general merchandise offering Counter shifts in the wholesale market where food has always been the key offering Provide a penetration tool into lower income groups Our Food offering caters to wholesale shoppers ranging from informal traders and grocery store owners to hoteliers, restaurateurs, offices and schools. Wholesalers account for the bulk of Makro’s food sales and most shop during the week for the convenience of our wide range of good-value, quality consumables.  At weekends, our focus shifts to promoting good buys for retail food and grocery shoppers who can achieve substantial savings on their monthly household basket compared with other traditional food retail outlets. General Merchandise Makro’s core product range About 2/3 of floor space is allocated to DIY, sports & outdoor, home & catering, office, appliances, clothing and a large electronics and gaming inter alia Deals on electronics are used to drive feet into store Health & Beauty Makro has a dedicated health & beauty section Emphasis is placed across media channels such as print i.e. broadsheets/catalogues, online and on the mCard App In-store promoters work well in this category, as they provide face-to-face brand education and shopper interaction with the product Baby Baby is a strategic category to improve the cyclical nature of the GM mix available. Offering a full selection of baby products such as clothing and accessories, to sit alongside the current product offering of nappies, food and toiletries. Page 3

Point of Purchase Execution What’s going on in-store | Themed Promotions Ti School of Retail | In-store Execution Excellence Page 4

Point of Purchase Execution What’s going on in-store | Multi Supplier Opportunities Birthday Promotion - 22 Jul - 20 August 2018 Supplier Promotion Drought Campaign – valid from 01 Jan - 31 Mar 2018 win a travel dash to 1 of 9 dream international destinations Swipe Makro card for automatic entry Page 5

Point of Purchase Execution What’s going on in-store | Bulk Display Opportunities Gondola End | Light Boxes Blitz Displays Bulk Display FSUs Store within a Store Dump Bins Ti School of Retail | Customer Excellence Note: To assist in building your Customer Business Plan, further detail is available to subscribers in the Trade Intelligence Research Report Library © 2019 |

Point of Purchase Execution Create a unique shopping experience - Annual Promotional Calendar All promotions from suppliers are presented to buyers / merchants. Buyers / merchants presents the ideas to the Makro marketing team where final decisions and approval take place Month Promotion Year-round Big Deals / Price-Cut Jan Back to ... (School, Office, Varsity) Jan – Dec More 4 Less (quarterly) / Big on Business Feb Petcare / Laundry / Baby / Valentines Day / Summer Sale Mar Easter / Summer Sale Apr Back to School / Autumn Sale May Mothers Day / Autumn Sale May – Jul Winter Sale June Fathers Day July - Sept 100 Deals 100 Rand 100 Days Jul - Aug Birthday Aug Pet Care / Wine & Liquor Sept Spring Sale / Heritage Day Nov Christmas Dec Christmas / Baby Effectiveness of multi-buy and R100 deals promotions Note: This is not a complete list but comprises of the main campaigns noted in the press – biggest annual promotions in yellow Page 7

Point of Purchase Execution Description What’s going on operationally? How does this impact Ops Strategy Opportunities Availability/ Range Makro focussing at a granular level on both the individual retail and commercial customers.   Be clear about what to offer them for both customer segments Centralized buying – with a regional focus, They specialise in catering lines Have you got lines that can be focussed at the catering industry Makro cutting ranges (stocking only 1 brand per category segment sometimes) Makro is looking at removing some of the smaller packs to push the customers to buy bigger packs Sometimes have to check stock counts Merchandising Planogram driven – guideline can benefit and disadvantage you Replenishment of stock – shortage of heisters etc (P) Heisters can potentially be built into trading terms Demand exclusive service, e.g. lots of merchandisers, 24hr merchandisers (S) Make sure this discussion is part of trading terms discussions Toolkit (Promotions) Makro is good at promoting bulk packs and value deals POS has to be branded Makro. (Supplier POS no longer allowed) More for less (the only way to get stock onto gondolas) Ti School of Retail | In-store Execution Excellence Page 8

Maryla Masojada | Lead Analyst Kerry Elliot | Senior Associate Analyst