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Give me your opinions on my Walmart article published in today’s Business Report May 12, 2011

Posted by warwicksworld in Uncategorized.
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Time is running out to get Walmart playing by SA’s rules

The Walmart/Massmart wrangle playing itself out at the Competitions Commission has all the signs of legal compliancy, but little pragmatism.

Someone should tell the Department of Trade and Industry (dti) to make an appointment with Walmart to find out what Walmart’s purchasing needs are. Tell them that we need their international marketing expertise to sell our merchandise into their worldwide operations. After all, if local subsidiaries work with their international head offices and there is the will to make it work then anything is possible.

Just ask Mercedez Benz South Africa and Volkswagen South Africa about their export successes to the global car markets.

We need to think of Walmart as a country and not a company. Gosh, its sales exceed $400 billion (R2.7 trillion) annually.

Sadly, there is little news of any proactiveness from the department.

The dti’s mindset is all cock-eyed. If your mission is to save jobs, success will be measured by how many jobs will have been saved. How about using the same energy to maximise job creation by “encouraging” Walmart to buy from South African companies for their operations worldwide?

The time for getting our “prenuptial” agreement sorted out with Walmart is running out fast. If that happens then it will be business the Walmart way – and South Africa would have missed out establishing a “new way” of doing business between multinationals and local businesses which the world could have learned from.
Walmart’s sales a day exceed $1bn and, as they say, in the first five minutes of any sales course “just ask for the order”.

I would be surprised if Walmart would say no to a worldwide procurement programme for South African industry. We have to be bolder.

Fighting Walmart’s takeover on the grounds of accelerated Chinese imports that will supposedly flood the newly branded Massmart stores ignores the reality of what is happening under our noses.
Chinatown malls and independent Chinese retailers are being established throughout South Africa.
Often flouting town planning regulations, manipulating import tariffs, ignoring labour regulations, employing their own nationals ahead of South Africans, almost zero local purchases, paying minimal taxes of any sort and offering an array of merchandise that would hardly pass an SA Bureau of Standards test and you have the Chinese way of doing retail business.

As for good corporate governance – what’s that! Staff training schemes – not likely and they employ their own nationals largely. In these malls the Consumer Protection Act (CPA) will be largely toothless.
My assessment of the “Chinese malls” in South Africa may sound harsh, but if we are worried about labour losses as a result of Walmart’s Chinese import substitution then it is already happening.
Walmart on the other hand will abide by our nation’s laws and regulations and make sure that its corporate governance is top notch. More importantly, it will have corporate social investment programmes, staff training schemes and pay vast amounts of import duties, company tax, unemployment insurance funds, income tax, VAT, skills levies and so on regularly.

And the CPA will mean something. In fact, its staff training is bound to be world-class. Finally, the dti will have access to the group’s importation records, which will show where the possibilities for import substitution lie.

Walmart may not be perfect, but as Lyndon Johnson, that venerable US president, once said: “I would rather have them in my tent peeing out and not standing out and peeing in.”

Warwick Smith-Chandler is the chief executive of Cape Town-based BizAssist.co.za.

What are your thoughts as compared to Business Day’s article: “Walmart to cost SA jobs, state warns tribunal”

Who do you agree with?

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Comments»

1. Henry - May 12, 2011

Hi I think you are ABSOLUTELY 100% correct !A very well written artice.
However it is a typical reaction from an insecure government. Instead of trying to facilitate business of any kind (Small or Large) they go out of their way to impede rather than encourage entrepreneurs and business, hence a massive unemployment crisis.

2. diaryofabizstart - May 12, 2011

Well said Warwick. The attitude of the dti and COSATU is not much different from the xenophobic thuggery we are seeing in informal settlements. Instead of embracing an opportunity to engage with an international retail giant, they stiffen their insular barricades and shoot entrepreneurs in the foot – again. An interesting development is that Massmart has just concluded an agreement to collaborate with local SME incubator Raizcorp to promote the development of new local suppliers who can become part of the Massmart/Walmart supply chain. Will government kill this initiative as well?

3. Nikki Viljoen - May 15, 2011

Well said. My take on this is that a little like Xenophobia (which in my opinion is just another name for racism), people are scared of losing out – of what I am not sure, because there is so much opportunity out there. The core problem is that they need to put away the begging bowls and actually get out there and work.

The MO seems to be get the job and then once you have it, become as disruptive and as negative as you can – make as many demands as you can, strike as often and as hard as you can and destroy as much as you can and then when you lose your job, run to the CCMA and then of course bring out the begging bowl and start all over again.

Quite frankly, it’s disgusting and it needs to end!

4. Nigel - June 9, 2011

Be careful. I have witnessed first hand how Walmart does business. There is a lot of short term gain for welcoming Walmart … but the result is long term pain. They bring down prices but at a cost. Don’t get me wrong, I think a free market is good for everyone but Walmart is now so large that they end up dominating the market. If you look at what is happening in the US, they also seem to flout domestic laws. That calls for special consideration.

As an aside, I found a book that tries to predict where all this is heading (http://www.amazon.com/Il-Vendetta-ebook/dp/B0053DQR24/).

If I were in South Africa (which I am not) I would tread cautiously.

5. Moses Harris Sr - July 1, 2011

We don’t want South Africa to make the same mistake with Walmart that America made with Sears, Roebuck and Company. Although Walmart today is the 600 pound gorilla sitting in the corner with unlimited resources and Sears/Kmart is attempting to just stay alive, South Africa must be clear as to what’s in the offering if they accept this behemoth into their country. I wouldn’t trust Walmart as far as I could throw a 600 pound gorilla. Peace and Love, M.

6. Lee - November 18, 2011

I used to work for Walmart…unfortunately it was a bad experience. I was part- time and they were giving me full time hrs..above 32 hrs weekly..I worked in the produce dept so I was informed that I couldn’t wear my nose peircing..so why do other associates where there’s? Any peircing is not a religion or culture its a FASHION!!!! I applied for customer service/ cashier..Mgr told me no positions were available..next day positions were available..cross training me in bakery…don’t get along with dept mgr and I let my mgr know that and she still scheduling me there…I thought cross training was 1 or 2 days? I guess not..my availability changes and I let my mgr but she can’t all of adjust my schedule because I spoke to another mgr about my situation…I was forced to put in my 2 weeks notice..which I never dealt with Millie…at all..you speak Spanish to the dept mgr in front of associates that don’t speak Spanish…I called to speak to. Higher manager they tell me they can’t talk to me unless I’m on the clock…Walmart on Sudley Manor in Manassas Va…yall got the nerve to have family written on the wall in the lunch room…Walmarts defenition of family is BOGUS!!!!!! Unhappy past associate….

Lee - November 18, 2011

Excuse the misspellings or missed words..I actually liked Walmart until I started working there…very rude, unprofessional..i wish Mr.Sam was still living..


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