Wal-Mart's Bond gives his word on jobs

In an interview with Business Times, Andy Bond, Wal-Mart's executive vice-president responsible for UK and Africa operations, said Walmart chose SA as the preferred country to expand the group's operations before looking for a local partner.

"South Africa is a true emerging economy in our view, the demographics and the economics of the country are very good for us," Bond said.

"And we particularly like the fact that there is an under-serviced customer at the moment that's emerging out of being underprivileged in the past, and we have great experience of helping those customers and at the same time making good business for ourselves."

The retailer, based in Bentonville, Arkansas, aims to grow Massmart's food business should it be successful in acquiring Africa's third-largest retailer.

A small African footprint, but a good one

Bond said Walmart likes the fact that Massmart has a good - albeit small - platform for growth in Africa.

Massmart, the owner of Makro, Game and Dion Wired stores, has a presence in 14 countries in sub-Saharan Africa, with 288 stores.

Wal-Mart's offer amounts to only 2% of its own market capitalisation, or just over 17% of this year's operating income. The deal is therefore not material for the massive multinational group, but it is of strategic importance.

Bond and Massmart managers have met labour unions to try to ease fears about possible job losses. The group said it will create jobs.

SA's largest labour federation, Cosatu, has spoken out against Walmart entering the country, calling it "one of the worst union-bashing employers in the world".

Bond said the group intends to invest in skills development and technical training for staff and those seeking work in the sector.

Move will fuel job creation

"We are very, very ambitious about the growth of Massmart and that growth will inevitably fuel job creation. Every market we are in we increase the job market over time. I don't think anyone should be concerned that Wal-Mart's entrance into the market will be a situation where we will reduce labour."

Bond said Walmart planned to retain Massmart's management. "We have no intention of parachuting people in from elsewhere."

Cleaning up its reputation as an employer

In the US, Walmart has been working hard to clean up its reputation as an employer. In recent years it has reportedly improved employee health benefits and paid hundreds of millions of dollars to settle lawsuits that alleged its workers were denied lunch and bathroom breaks.

Walmart owns Asda, the UK retail giant, where Bond joined 13 years ago as a marketing manger - before climbing the corporate ladder until being appointed president and CEO of Asda in March 2005, and more recently Asda's executive chairman.

On Thursday Walmart announced a programme that focuses on sustainable farming among its suppliers - and thereby reduce its environmental impact.

For several years South African wine farms have been supplying Walmart globally under its own brand names. Bond said Walmart would be working more with South African suppliers and would possibly increase the export market.

Massmart will be delisted from the JSE once the deal goes through. The company will update shareholders when it renews its cautionary announcement on November 8.

Source: Business Times