Walmart will be competing with the likes of Shoprite, Pick n Pay, Spar, Boxer, and Woolworths.
Walmart will open the doors of its first-ever South African store on Saturday, with the idea of offering customers ‘everyday low prices’, which is really what people in the country need, given the high cost of living. However, can it deliver lower prices than Shoprite and others?
Walmart’s parent company, Massmart, has selected Clearwater Mall in Roodepoort, Gauteng, as the location for the first store in the country, with Fourways Mall to follow. Massmart is also the owner of popular stores such as Makro, Game and Builders Warehouse.
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Does Walmart offer lower prices?
The American retailer on Thursday hosted media members for a pre-opening tour of the store. To demonstrate that the store offers ‘everyday low prices’, Walmart representatives visited two competitors and bought basic grocery and household items that most people in South Africa buy regularly.
Walmart will be competing with the likes of Shoprite, Pick n Pay, Spar, Boxer and Woolworths. However, it did not specify which two competitors its representatives compare prices with. The competitor uses loyalty rewards cards that allow customers to pay lower prices for items during promotions. Walmart doesn’t have this.
Based on the items bought from the three stores (Walmart included), Walmart did come as the cheapest retailer, with the groceries costing R1 680. Competitor one had a total of R1 713, and without promotions, the total would have been R1 895. The second competitor had a total of R1 868, and without promotions would have been R1 901.
The products that were used included canned foods, frying oil, sugar, rice, and dog food, among others.
Walmart bring new offerings to SA
Walking around the store gave a feeling of walking around a Game store; the only difference was the branding, which was blue instead of pink. It also closely resembles Makro; the only difference is that Walmart doesn’t offer products in bulk.
However, you can find your groceries at the store, household products, toiletries, clothes, and appliances such as TVs, cellphones, and gaming consoles, the same as at Makro and Game. The one thing that makes Walmart stand out is its international products from the United States and the United Kingdom.
Another thing the American retailer is attempting is to enter the fresh food space, a space Game tried to enter a decade ago but failed.
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Will Game close down?
During the media Q&A, Massmart Chief Operating Officer Dries D’Hooghe and other representatives of Massmart were asked if Walmart would be replacing low-performing Game stores in the country, a move previously seen with Pick n Pay converting low-performing stores to Boxer.
D’Hooghe said they will not be closing down Game or Makro in the country, as each retailer has its own mandate. However, he did say Walmart will be converting some of the existing stores.
“Because we wanted to open Walmart as soon as we can in the country, we will be taking over some of our already existing infrastructure. But this does not mean we are closing down Game.”
Mark Scott, Massmart’s merchandise vice president, highlighted that Makro is like a wholesaler, offering bulk products to customers, especially stokvels and other small retailers. While Walmart will be your one-stop, everyday shopping.
Other stores soon?
When asked about other store locations, they said they cannot reveal too much about future plans, but any new stores will be opened based on local demand.
Scott said their target market is the middle-income group.
On Saturday, Walmart’s shopping app will also go live, allowing customers in surrounding areas to purchase products and have them delivered to their doorstep within 60 minutes.
One thing the American retailer prides itself on is 100% of its employees are South Africans, from the in-store staff to the 25 drivers that will be delivering the orders made on the app.
Benefits for employees
There has been much speculation about the low salaries paid in retail. This is something The Citizen has not been able to confirm from retailers in the country, despite multiple attempts.
However, Walmart’s HR manager told The Citizen it will be paying its employees 50% above the market. The employees also have various benefits, such as 100% salary continuation during maternity leave.
“Some companies pay 75% of the salary while on maternity leave, but here we pay your full salary for those four months. And if you want to extend your leave, you can, depending on how many annual leave days you have or if you are willing to take unpaid leave.”
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