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Walmart announces price cuts in SA

Jun 26 2011 12:18 Sapa

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 144.49
Change -0.51
% Change 0.00
Cumulative volume 244262
Market cap 31.37bn

Last Updated: 28/07/2014 at 03:38. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Six days after US giant retailer Walmart completed its acquisition of a controlling stake in Massmart, it started advertising price cuts and new business opportunities for South Africa.

An eight page colour advertisement in the Sunday Times newspaper was South Africa's first introduction to the Walmart brand.

The advertisement included a letter from "the people" of Massmart and Walmart announcing the merger and price cuts by the group's retailers Game, Dion Wired, Makro and Builders' Warehouse.

Massmart also said it intended creating 15 000 jobs in the next five years.

"While there are other exciting promotional campaigns planned, this offering so soon after the finalisation of the Walmart merger is a clear demonstration of Massmart and Walmart's intent to save people money to live better," Massmart CEO Grant Pattison said in a statement on Sunday.

Earlier, he told the Business Times there were no plans to open Walmart-branded shops as the local brands had "plenty of value", and there were plans to open 40 more of them in the next financial year.

However, these brands would be advertised under Walmart's blue and yellow logo.

Walmart completed a R16.5bn conditional transaction to buy a 51% stake in Massmart Holdings [JSE:MSM] on Monday, after getting the go-ahead from the Competition Tribunal.

The merger was conditional on the setting up of a R100m supplier development fund, no merger-related retrenchments for two years, and recognition of the SA Commercial Catering and Allied Workers' Union for three years post the merger.

In the statement on Sunday, Pattison said the supplier fund was being created.

Walmart has 55 brands around the world in, among other countries, Canada, Brazil, China, Chile, Japan and Mexico.

Its share of Massmart would be a stake in emerging African markets.

Before the deal was concluded, the South African government and unions voiced concerns that it would lead to job losses and hurt local procurement.

However, the Competition Tribunal found that the conditions to counteract this, which were proposed by Walmart and Massmart, were sufficient and were enforceable.

"Both Massmart and Walmart remain committed to partnering with the South African government as well as all key stakeholders, and we stand by our stated commitment to encourage other international companies to invest in Africa's vibrant economy," Walmart CEO Doug McMillon said in the statement.
walmart  |  massmart holdings  |  retail
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