Fin24

Walmart advent a boon to SA shoppers

2012-07-16 12:41

Johannesburg - Walmart's entry into SA, with the retailer's low-cost philosophy, continues to shake up the retail sector as Massmart subsidiaries and its biggest competitors feel compelled to cut prices, said Business Report.

The paper quotes Alan Coward, CEO of home appliances supplier Amalgamated Appliances, as saying: "Walmart's entry has indeed resulted in consumers being winners.

"With Walmart coming here things have changed and competitors have upped their game. Suppliers have cut costs where necessary, especially in their distribution centres and their warehouses." 

Coward said although some suppliers had to reconsider their selling prices, "they have worked with the retailers but not in a collusive manner".

It is evident that competition is heating up in the retail space, especially between Shoprite Holdings [JSE:SHP] and Massmart Holdings [JSE:MSM], which have adopted longer price-cut promotion periods, the report said.

Retail analysts said price-cut promotions have definitely benefited consumers.

Since the beginning of the year, both Massmart and Checkers reportedly claim to have saved consumers up to R300m through aggressive discounting, and by keeping prices lower for longer.

 

Comments
  • dunhin.ernest - 2012-07-16 14:04

    I don't quite agree with this article, as I have seen specifically @ Shoprite Checkers that even though they have price cuts on certain items, other items are prices up to compensate for the cuts on other products. So in the end the customer is thinking he is winning but he is in the same or even worse position

      James - 2012-07-16 20:44

      Walmart saves the ave US family $2500 pa. Nobody beats their prices. But beware do not buy too cheap, you get what you pay for even at WM. All US retailers sells "China". WM will try to source local Mnf/grown.

      maxie.diamond.75 - 2012-07-17 08:01

      As long as you buy the "certain items"you're winning.

      christopher.collings.9 - 2012-09-23 18:13

      James do u live in the US? How do u know this? And what ur saying is rubbish there are cheaper stores in the US to buy from eg: Buy for Less & I live here.

  • peter.fraser.92754 - 2012-07-16 15:09

    A few items are cheaper and of inferior quality.However..one cannot eats kettles,tv's and electronic wares. THAT is where the price cuts should be. Same as Checkers..they advertise a few polonies and washing powders at a special, and with the rest? Man, do they hit you with prices.......you dont save a thing.If you did, your monthly grocery spending will come down....but it doesnt !! You buy the same things month after month and pay more month after month.Who are these people bulldusting...hopefully not you !!!

  • andre.kuhn.583 - 2012-07-16 15:36

    There is not yet enough competition in SA. Wallmart is welcome to increase it. I fully agree to Konstabel. Middle men and iefficiant logistics are one of the main price drivers.

  • Masemolatumi - 2012-07-16 16:02

    What people dont see is that this buyout has had a very negative impact on Small Retailers who rely on the South African Distribution channel to sell electronic products, such as Computers, Printers etc. What we are seeing and I'm speaking as one of those small businesses, is that Makro, Game etc, have dropped prices so low, that they are now cheaper than our suppliers. So before we can even put markup on equipment we sell, we are already too expensive. If this situation prevails, small business will close shop soon and people will lose jobs. So in as much as consumers are happy, small business is affected badly!

      patrick.saunders123 - 2012-07-16 17:33

      have you ever tried to get any level of service out of the big box droppers? Compete on service, extras and skill and customers will choose your company.

      sterling.ferguson.5 - 2012-07-17 06:57

      The small retailers are gone with the wind because they can't compete with a store that can pay people to grow food for them and make goods for them in vast quantities. The modern world is now coming to SA because people can go into Walmart and make one stop to get everything they want.

  • luca.delbianco.3 - 2012-07-16 16:12

    A quick question ... but when will actually Wallmart enter the local market with those...super affordable prices we have been told all along about?? Cheers.

  • dmawila - 2012-07-17 09:53

    lower prices, no complaints from me....competition is always good for the consumer

  • carlos.deabreu.338 - 2012-08-21 11:28

    Rumour has it that they not doing as well as expected, big boys from the states underestimated the buying power and loyalty of the independent retailer not to mention the growth of asian retailers flooding the market with their goods and services(the new breed of cafe or cornershop owners). Lets hope that Massmart's adventure in South Africa wont be the same as that of Pepsi.

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