Even the best business model requires a refresh at times. It is what 38-year-old Cashbuild has been doing since 2010, with exceptional success. The core model remains one of retailing high volumes of building materials at discount prices through large-format stores. What has changed is the approach to operational efficiency and a more dynamic approach to increasing store footprint and gaining market share. The first move came in 2010 when the go button was pushed for implementation of an SAP procurement and supplier payment system. Also added was a QlikView data analytics system. Results have been worth the considerable effort and cost. Reflecting this, operating profit margin in the year to June 2016 came in at 6.3% against 4.5% in 2010. On Cashbuild’s R8.67bn revenue in its past year margin uplift added R156m (40%) to operating profit of R548.5m. The past year had another notable deviation from past strategy: Cashbuild undertook its first sizeable acquisition. "We had previously m...
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