Walmart for South Africa

Posted: October 21, 2010 in News
Tags: , , ,

By Odette Kemp

The possibility of Walmart in South Africa has been eliciting mixed responses from different sources.

Walmart, a large retailer in the United States, has placed a bid on Massmart, the third largest retailer in South Africa. If the R30 billion proposals are accepted, it could have far-reaching consequences for the country – for better or worse.

The National Treasury director general, Lesetja Kganyago, encouraged the public to “embrace globalization”, instead of fighting the change. “We are busy exploring the demerits of globalization while other countries are finding ways of benefiting from it.” If Walmart does enter the South African market, it will most likely lead to lower prices for consumers, not only from Walmart, but also from its competitors. Abri du Plessis, chief investment officer at Gryphon Asset Management, reckons that “South African retailers will have to sharpen their pencils.”

According to Tim Harris, the shadow trade and industry minister of the DA party, this investment could “bring real benefits to an economy still struggling to shrug off the effects of recession.” This was said in light of COSATU’s complaints that Walmart was known as being “notoriously anti-union”.

Harris disagrees with COSATU’s concerns, saying that all businesses in South Africa would have to abide by the laws of the country. “It is up to the government to welcome new investors into our economy – and then regulate them fairly and effectively.”

In a statement reacting to COSATU’s claims, the Walmart group assured that they would not transgress the labour laws of South Africa, were the bid successful. “Walmart does not adopt a single labour relations strategy because each country is different.” Massmart reinforced this statement, saying that “it had no doubt that Walmart would honour pre-existing union relationships and abide by South African labour law.”

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