This week saw the realization of what many have speculated for quite some time, Walmart finally chose their African bride. The American retail giant made a $3.4 billion offer for South Africa’s Massmart and, the companies have allowed one another mutual periods of exclusivity. If successful, Walmart would acquire Massmart’s 290 stores in 13 countries. Whilst this pales in comparison to Shoprite’s 1166 stores in 16 countries, it still outweighs Pick n Pay’s portfolio of 90 stores outside of South Africa. That being said, Walmart had a lot more to consider when making the offer than just sheer size.
“Massmart is the closest fit to Wal-Mart’s retail style. Shoprite and Pick n Pay are mostly food retailers, while Massmart sales comprise 53% food and liquor, 42% general merchandise and 13% home improvement. The company’s stores range from Game, the closest thing SA has to a US-style discounter, to Builders Warehouse and Makro.”
Amongst those opposed to the deal is Saccawu who hope to contact “[the]Minister of Economic Development Ebrahim Patel as well as members of civil society and the international trade union movement to help it ensure that there would be no erosion of workers' rights as a result of Wal-Mart acquiring Massmart for R30 billion, as proposed on Monday.”
Pick n Pay also made headlines recently when 27000 Saccawu members went on strike last week Friday as a result of deadlock over ongoing wage negotiations. Furthermore, they also garnered attention when Australian regulators became concerned with Pick n Pay’s planned sale of its 85 Franklin’s stores. The sale would give the retailer the impetus it’s looking for to “upgrade and revamp its distribution network in its South African business” to better compete with rivals.
It’s clear that the battle for the retail crown has only just begun and shows no signs of slowing and, with all the main players so closely matched it won’t be one to be missed.
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