Walmart committed to sourcing products locally

Amid a storm over government’s review of the Massmart/Walmart merger, the American owners of the country’s new South African retail giant have pledged to adhere to its globally practised “local is lekker” policy. According to an article in The Wall Street Journal last week, Wal-Mart Stores Inc is finding it can save money by buying more fruits and vegetables grown closer to its stores. The company intends adopting the same principles in South Africa and on the African continent. On Tuesday the Ministers of Economic Development Ebrahim Patel, Trade and Industry Rob Davies, and Agriculture, Forestry and Fisheries Tina Joemat- Pettersson announced that they were concerned that the main risk to South Africa posed by the merger was an increase in imports by Walmart/Massmart, causing a decline in local manufacturing and production across a wide range of consumer products including agroprocessing, the furniture industry, electronics, plastics and household goods as well as clothing and textiles. “These effects, if realised, will lead to the closure of a number of local businesses and local job losses,” they claim. However, Massmart and Walmart said in a statement that from an employment perspective, the company realised that the transaction would accelerate Massmart’s Berthing delays cause havoc Walmart committed to local products investment in growth, resulting in the creation of approximately 15 000 jobs in retail over the next five years, a view that they reaffirmed in an open letter to South Africans. “Furthermore, a review of Walmart’s international operations will reveal a demonstrable track record of developing local suppliers in the markets within which it operates, not least because this makes commercial sense.” Massmart and Walmart reiterated their commitment to establishing a programme aimed at the development of local South African suppliers, funded in an amount of R100 million. “To give further effect to our commitment to local supplier development we recently appointed Mncane Mthunzi, with executive responsibility for supplier development. In addition Massmart and Walmart have expressed publicly that we anticipate spending approximately R60 billion over five years on FMCG products, most of which will be procured from local suppliers,” the statement said. Government’s decision to review the merger has been slammed by economists.