The Deal of the Decade

With Tuesday’s Competition Tribunal go-ahead for the Walmart/Massmart merger, one of the most significant business deals of the new millennium – certainly for South Africa and Africa – is here.

The emergence of Massmart as a more significant player in food and a consolidating force among some of the bigger independents is already changing the competitive landscape. Some retailers are looking to global markets for better prices, so the increased competition between retailers will translate into a tighter squeeze on prices at the factory gate. Down the line, Walmart’s supply chain practices will have a knock-on effect, leading to a general sharpening of efficiencies in the sector.

Walmart/Massmart have undertaken to honour existing union relationships, to guarantee jobs against merger-related losses for the next two years and should the opportunity arise to re-employ the 500 employees who lost their jobs in July 2010. Of major significance is the R100 million supplier development fund the retailers themselves put on the table.

Not all of the effects of the deal will be benign. “Walmart’s proposed entry into areas presently under-served by large retailers may displace certain small businesses and in others, reduce the market share of some of the major retailers. That is an inevitable consequence of the competitive process,” according to the Tribunal.

But as a stimulus for a still fragile consumer economy, and a vote of confidence in South Africa and the continent as a destination for serious investors, the transaction could not be better timed.

• The continued use of the Massmart trading brands
• The opening of more stores across the divisions and further expansion into Africa
• An expansion into food spearheaded by Cambridge Foods
• New and better products
• Better prices for the South African consumer

This incisive presentation provides the practical tools you need to start capitalising on the arrival of Walmart from Day 1 and into the future.