Integrated Annual Report

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The environment we operate in

The general context in which we operate impacts our ability to deliver on our strategy and create sustainable value.

The table below illustrates the existing and emerging trends which prevail in our industry and market, the effect they have on our business, and our strategic response, which is aimed at mitigating or managing any negative impact, and wherever possible, capitalising on opportunities presented.

Market and/or industry trend   Impact on our business     Our strategic response
Constrained consumer disposable income continued to curtail discretionary spend.  

Weaker sales environment.

Intensified value scrutiny.


We strive to ensure our brands are aspirational and offer customers consistent year-round value.

Our goal is to deliver an unparalleled shopping experience.

Our price offering is supported by strong brand equity, product quality, and customer-centric service.

Highly competitive trading landscape and increase in opportunistic traders due to the global oversupply of tiles.  

Intense competitor activity with margins sacrificed by operators striving to survive.


We focus on achieving an optimal  product-price-margin matrix, which holds appeal for customers but supports margins for store operators. Our robust cost leadership ethos is key to preserving margins.

In light of the oversupply, buying opportunities for the Group exist in traditionally high-priced markets including Italy, Spain and India.

Flight of capital in the upper-LSM market segment.  

Significantly reduced or deferred spend by consumers in the premium-end of the market is likely to impact our Italtile Retail brand performance.


Our brand offering is strategically positioned to appeal to consumers across the income spectrum and hence spreads and reduces risk.

Opportunities exist to migrate upper-end CTM customers into the Italtile Retail space with a carefully curated range of high-quality import substitute tiles.

Consumer demand for convenient shopping experiences.  

Demand for access to omni-channel shopping options and seamless transition between online and physical stores.

Demand for faster, more efficient in-store service. Aligned to this is the growing trend of pre-retailing, which empowers consumers to research and inform themselves before engaging with a sales person.


We invest in a combined click-and-brick trading format.

We continue to roll out stores to under-serviced markets – with good success. TopT also launched a mobile Gig Rig which was well received by rural communities. Additionally, we continue to explore flexible store-size formats relevant to specific markets for all our brands.

We invest in technology to improve the customer shopping experience both in-store and online. During the year, our stores benefited from enhanced point of sales equipment, improved analytical tools for operators, while in Italtile Retail, we deployed room-build visualisers.

Across our webstores, major technological inroads were made with the implementation of an upgraded
e-commerce operating platform and development of a bespoke CRM solution; enhanced credit options and payment methods; and the launch of a webstore for TopT. All of our brand webstores reported strong growth in sales and unique visitor sessions.

Technology and fashion are increasingly interlinked.

The role of social media influencers is playing an increasingly important role on local consumers.

Access to the internet, largely due to smartphones, continues to gain momentum locally.

The omnipresence of social media and growing sophistication of local consumers is driving an international fashion bias, rapid design evolution and quicker fashion changes, while the demand for instant gratification dictates shorter lead times.


Our new Gryphon factory is the leading manufacturer of import replacement-quality large format tiles, while all of the Group's factories utilise state-of-the-art inkjet technology. This technology enables timeous manufacture of up-to-the-minute designs, giving the Group a key strategic advantage in the market.

Strong sales of Gryphon's large format tiles and wood- and cement-look tiles, which mirror international design trends, corroborate this trend.

The traditional customer profile is evolving.  

Research confirms that single females are starting to dominate in freehold sales for new properties* and our in-store anecdotal evidence illustrates that increasingly, women are making the major decisions in home-finishing purchases.

* Lightstone, July 2019


Our business is well-positioned to capitalise on this trend, since we are viewed as a fashion retailer rather than a building materials supplier.

Unrelenting effort is directed at ensuring the shopping experience is aesthetically pleasing, with our keen focus being on fashionable product, stylish presentation and aspirational lifestyle displays.

Increasingly, we will explore opportunities to enhance our pool of female store operators and sales consultants.

Industry-wide shortage of skilled retail-specialist personnel.  

Competent, ambitious, fit-for-purpose employees and franchise partners are key to the Group's success.


Our training and development spend is significant and is aimed at building a deep resource pool of appropriately skilled personnel.

To ensure that we recruit and retain the right calibre of individuals, we drive the culture and activities of the business through our core values and beliefs.

We continue to review and upgrade our learnership programmes and recruitment methodologies to ensure our people are aligned to our growth strategy. Our partnership and reward initiatives are designed to incentivise our people and position the Group as an employer of choice.

Innovative in-store shopping experiences are increasingly important.  

Online access has educated consumers and influenced in-store expectations. Customers are increasingly more discerning and demanding and quick to use social media to share their experiences.


We recognise that successful retailers are defined by consistently memorable shopping experiences. We continue to focus on up-weighting the 'delight and disrupt' factors in our stores through innovative layouts, lifestyles, products and use of technology.

In order to broaden our comprehensive offering and enhance the customer shopping experience, we also successfully introduced an installation service for Italtile Retail and CTM, which provides professional experts to assist customers with installations or renovations. Teams are located throughout Johannesburg, Pretoria and Cape Town. Across all installations completed, our customers rated us 4,5/5, a rewarding achievement – although we are mindful that there is room for improvement.

In the year ahead, we will continue to make better use of analytic data to drive targeted customer marketing.

Intensified consumer focus on ESG issues.   Environmental mindfulness is a growing trend among consumers, stemming from the goal to create a sustainable society.    

The Group employs a dedicated Citizenship Manager who is tasked with reviewing and reducing the Group's carbon footprint on an ongoing basis.

Across our operations, we strive to reduce consumption of non-renewable resources and, where possible, increase generation of renewable resources.

Our factories at Ceramic Industries use the latest technology to ensure efficient production, and rank among the most energy efficient in the world. Concurrent rehabilitation of raw material quarries is conducted and quarries are rehabilitated once end of productive life is reached.