Mass Retailing in South Africa and Government Concerns
When it comes to big box stores regardless of what nation, there is always a bit of fear with governments, small business, and consumers. MassMart is one of South Africa’s largest retailing big box store retailing chains, the third largest in fact. And as you’ve probably heard Walmart is seeking to purchase their entire chain of stores and distribution system. But now the South African Government is concerned, as I suppose any government might be when a foreign nation comes in to purchase a large mainstay business, which employs a huge number of folks.
Amongst the biggest concerns are that Walmart may not keep all the local suppliers and bring in products from other countries, and may not support the community and other small businesses to the same degree as it wouldn’t have the same loyalty factor. Now then is this fear justified? No probably not and let me explain why. Walmart obviously would buy locally because things cost less to produce in Africa than elsewhere in the world, and it might be a big boom as Walmart may purchase more from Africa in the future, selling their products in stores around the world, as Walmart is a huge international company.
Not long ago, I was discussing this with someone I happened to meet by chance once in my life. They told me that they felt as if Walmart was bringing in too much from China and hurting the US economy. However, I guess I disagree with some of the critique the company gets in the US, because I fully support Walmart. You see, Sam Walton was a great man. I am a pro-Walmart person. The company is probably amongst the top 5 greatest companies ever created in the history of mankind.
For those, who are upset because Walmart is a non-union company, well, I’d say that Sam had vision and Walmart should not be forced into union-labor extortion tactics as a criteria for operating in any city in the US or any other country for that matter. Further in the case of the South Africa MassMart potential acquisition, well, without free-markets – South Africa’s economy will eventually fail, and communism or a far-left leaning socialist government will come to power and thus, over time destroy all of their hard fought gains and recent rise to economic strength.
South Africa has made great headway over the years, and the way I see it, Walmart could become the best thing that ever happened to that continent, I assure you of that. So, I believe after analyzing this deal that the South African authorities may be misreading Walmart’s intentions and their fears are unjustified. Indeed, I hope you will please consider all this.
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