Massmart acquires The Fruit Spot

Massmart are not holding back. They announced plans to buy The Fruitspot as part of its strategy to expand into its fresh food offering. It's a small transaction by Massmarts standards, we know this because the news was not released on SENS. This is because it is not deemed material enough. It is good to know however that they have their strategy and are wasting no time in implementing it.

The Fruitspot was started in 1989 by three Portuguese brothers who saw a gap in the market for good value fruit and vegetables with fantastic retail services. The company started from humble beginnings in Midrand to a R60m facility in Marlboro which allows for additional production facility if needed. They have a fleet of 60 vehicles, most of them refrigerated, which distribute their product all over the country. Clients include Netcare, Famous Brands, Sishen mine, Sun City, Spar, Friendly Grocer, Air Chefs and a number of restaurants and caterers.

So how are Massmart going to integrate this into their business? They want to start turning Makro into a full out supermarket. They will probably keep the business as is but up the capacity to now supply all their Makro branches. The facility has the capacity to expand and Massmart have the capital to add to the fleet. We could start seeing Makro's looking more like Fruit and Veg City's.

Nothing wrong with that. Everyone over the age of 14 loves fresh fruit and vegetables. Plus it is good for you. The more the awareness of a healthy lifestyle grows the more fresh produce will be consumed. At the same time, instead of going to the shopping mall on a Saturday morning and moving from shop to shop to get your essentials, you can go to a Makro, get all your groceries, get an oven to cook the food in, get a lawnmower for the garden and nappies for the new born. Easier, quicker and cheaper. It's the way our patterns of consumption are moving and the companies who manage to implement these services first and best are the ones that are going to blow the lights out.