RETAIL SECTOR
Massmart still failing to deliver for Walmart
Walmart may have been overoptimistic about the deal and have underestimated the difficulties that SA retailers face
More than seven years after the $2.5bn acquisition of Massmart by Walmart, the merger between the world’s largest company by revenue and Africa’s second-largest distributor of consumer goods is yet to set the SA retail sector alight. Walmart’s high-profile purchase of a 51% interest in Massmart — whose products straddle the general merchandise, liquor, home improvement and wholesale food markets — heralded the US group’s foray into Africa. It was part of a broader strategy to get into high-growth markets. With such growth aspirations in mind, Massmart, a high-volume, low-margin business, was a logical target for Walmart. "We see an opportunity to take our mission and apply it in this part of the world and create growth opportunities," Walmart CEO Doug McMillon said in January 2011. Indeed, since the deal was consummated in June 2011, Massmart, the owner of Game, DionWired, Makro and Cambridge brands, has increased the number of its stores from 288 to 424, as of January 2018. It has ...
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