BuildCore Retail Group — Operations Plan
The supply chain and procurement, distribution and logistics, the regional rollout sequencing, inventory management, the unit store economics, human capital and the quality, safety and compliance framework.
Section 8 · Business Plan
Operations Plan
The supply chain and procurement, distribution and logistics, the regional rollout sequencing, inventory management, the unit store economics, human capital and the quality, safety and compliance framework.
8.1 Supply Chain & Procurement
Procurement is centralised to aggregate volume across the network and
secure manufacturer rebates and direct-delivery arrangements. The Group
negotiates framework agreements with cement, steel, timber, roofing and
hardware suppliers, while multi-sourcing key categories to manage
supplier power and import-price volatility. Goods flow through regional
distribution centres that consolidate inbound volumes and replenish
stores on efficient delivery cycles.
8.2 Distribution & Logistics
Two regional distribution centres are commissioned across the plan,
supported by an owned-and-contracted logistics fleet. The distribution
backbone is deliberately built ahead of the store network to protect
availability and working-capital efficiency. Logistics costs are managed
toward 3.2–4.0% of revenue, declining with scale and route density.
The distribution model is hub-and-spoke. A primary distribution
centre anchors the highest-density region (Gauteng) from inception,
consolidating inbound manufacturer volumes and serving stores on fixed
daily and weekly replenishment cycles. A second regional centre is
commissioned as the network extends into KwaZulu-Natal and the coastal
corridor, reducing line-haul distances and protecting in-stock rates.
Bulk, low-value-density lines such as cement, sand and aggregates are
increasingly drop-shipped direct from manufacturer to store under
framework agreements, reserving distribution-centre capacity for
higher-value, multi-line replenishment.
| Logistics metric | Year 1 | Year 3 | Year 5 |
|---|---|---|---|
| Distribution centres | 1 | 2 | 2 |
| Stores served | 16 | 46 | 84 |
| Fleet (owned + contracted) | 14 | 40 | 74 |
| Logistics cost (% of revenue) | 4.0% | 3.6% | 3.2% |
Table 8.1 — Distribution and logistics scale-up.
8.3 Regional Rollout Sequencing
The network is rolled out region by region rather than thinly across
the country, so that procurement, distribution and brand presence reach
efficient density in each catchment before the next is opened. This
sequencing tracks the geographic concentration of the housing backlog
and mass-market demand, and keeps logistics line-haul economics tight as
the footprint grows.
| Region | Entry | Year 5 stores | Rationale |
|---|---|---|---|
| Gauteng | Year 1 | 32 | Largest catchment & backlog; anchor DC |
| KwaZulu-Natal | Year 2 | 20 | Second-largest backlog; coastal corridor |
| Western & Eastern Cape | Year 3 | 16 | Urban growth & renovation demand |
| Limpopo & Mpumalanga | Year 4 | 10 | Underserved peri-urban & rural nodes |
| North West, Free State & N. Cape | Year 5 | 6 | Selective infill of viable nodes |
Table 8.2 — Phased regional rollout sequence
(indicative).
8.4 Inventory Management
Inventory is managed to a target of 55–62 days, balancing
availability against working-capital efficiency. AI-assisted demand
forecasting, real-time inventory visibility and disciplined range
management drive turnover and reduce shrinkage and obsolescence.
Fast-moving core lines (cement, blocks) are prioritised for
availability, while slower lines are managed centrally.
8.5 Unit Store Economics
The single store is the fundamental building block of the model, and
its economics are benchmarked against listed mass-market peers. A
BuildCore store is designed to reach maturity over its first 18–24
months of trading, ramping from an opening run-rate to a stabilised
mature contribution. The illustrative mature-store profile below
underpins the network-level projections in Section 12.
| Mature-store metric (illustrative) | Value |
|---|---|
| Annual revenue per mature store | R38–R42 million |
| Gross margin | ~26% |
| Store-level operating costs (% revenue) | ~15–16% |
| Store-level EBITDA margin | ~10–11% |
| Average transaction value (blended) | R700–R760 |
| Maturation period to stabilised run-rate | 18–24 months |
| Indicative store fit-out & equipment capex | R9–R11 million |
Table 8.3 — Illustrative mature single-store economics.
Because new stores open through the year and take time to mature, the
average trading-store revenue across the network sits below the mature
run-rate in the early years and rises toward it as the cohort seasons —
a dynamic reflected explicitly in the revenue build of the financial
model.
8.6 Human Capital
The Group scales its workforce in line with the store network,
reaching a headcount that supports a national operation by Year 5. The
organisational structure spans retail operations, logistics and
warehousing, procurement, finance and administration, IT and digital,
and management. Recruitment is phased to align with store openings, with
structured training programmes (“the BuildCore Way”) ensuring consistent
service and operational standards.
| Department | Year 1 | Year 3 | Year 5 |
|---|---|---|---|
| Retail operations | 430 | 980 | 1,560 |
| Logistics & warehousing | 150 | 300 | 560 |
| Procurement | 30 | 60 | 90 |
| Finance & administration | 45 | 85 | 130 |
| IT & digital | 25 | 45 | 70 |
| Management | 20 | 35 | 55 |
| Total headcount | 700 | 1,505 | 2,465 |
Table 8.4 — Indicative human-capital build-out by
department.
8.7 Quality, Safety & Compliance
BuildCore maintains rigorous standards for product quality,
occupational health and safety, and regulatory compliance, including
supplier compliance checks to exclude substandard imports that pose
safety risks. Store and warehouse operations adhere to applicable South
African health, safety and environmental regulations.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of BuildCore Retail Group.