DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Retail

Walmart’s South Africa Growth Slowed by Mall Fight

By square1
Share this article
Walmart’s South Africa Growth Slowed by Mall Fight

As South African supermarket chains seek to defend their business from the encroaching heft of Walmart Stores, the US retailer is getting mired in a food fight at the mall.

Game, a chain owned by Walmart that’s known for household goods ranging from soap to electronics, is encountering opposition as it adds fresh produce to the mix. Rivals with stores in South African shopping centres that have Game outlets have sued to enforce lease clauses barring new food retailers.

At CapeGate Mall just northeast of Cape Town, Game’s food section has been cordoned off twice since the store introduced fresh produce in September 2013 after legal manoeuvring by Shoprite Holdings and Pick n Pay Stores.

“I was very disappointed when Game stopped selling fresh meat and vegetables,” said Rebecca Benjamin, 39, who works at a nail salon at CapeGate and is a regular at the store. “I always look in the newspapers for the Game specials.”

The wrangling threatens to stifle Walmart’s expansion in a country where rising incomes present a “tremendous opportunity,” chief executive officer Doug McMillon told investors in 2010, when he headed the company’s international business. Walmart three years ago bought a controlling stake for 16.5 billion rand ($1.5 billion) in Johannesburg-based Massmart Holdings, which owns Game and 10 other chains.

ADVERTISEMENT

While Walmart generates almost $138 billion in annual sales from 26 countries outside the US, it has struggled in some markets. The company shuttered its German stores in 2006, and has yet to find a suitable local partner in Russia. Last year, Walmart broke up with India’s Bharti Enterprises and only has a wholesale business in that country. In Japan, it has said it will close 30 of its 373 outlets.

Bloomberg News, edited by ESM

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.