Unions lose attempt to block Walmart’s bid to buy SA’s giant retailer
IF LAST MONDAY’S developments are anything to go by, the “anti-Walmart coalition” – led by retail trade union Saccawu and backed by South Africa’s biggest labour federation, Cosatu – has effectively lost its bid to block United States retail giant Walmart Stores from acquiring local counterpart Massmart Holdings. At a specially convened Massmart shareholders’ meeting last week, Saccawu wasn’t only unable to win a single institutional share- holder to vote against the deal but also couldn’t mobilise its own members to picket outside the retailer’s head office as planned. The protest was cancelled at the 11th hour because Saccawu’s members didn’t show up, apparently because Massmart threatened to dismiss employees who joined the picket. Massmart CEO Grant Pattison denied that.
Whatever the case, Saccawu and its allies – including Geneva-based UNI Global Union 1,2%. Masscash – its cash and carry division – grew by 12,4% (comparable: 4,2%) with deflation of 1,3%. A surprising performance was recorded by its home improvement and building materials division Massbuild, which grew sales by 18,6% (comparable: 11,8%), with inflation at 0,3%.
“Massbuild is very interesting. We suspect people for a while delayed maintenance on their houses. Now they’re being forced to fix the toilet, paint the wall, replace the carpet,” says Massmart CEO Grant Pattison. “We’re seeing a little bit more home maintenance than building new houses. I also think in that division we’re doing better than our competitors and our market share is increasing. I don’t think the home improvement market is growing as fast as Massbuild. We’re running ahead of the market.”
Massbuild is a fairly new division within Massmart, growing out of acquisitions against criticism that a building materials chain doesn’t fit quite well within Massmart.
Its retail brands include Builders Warehouse and Builders Express. and the North American United Food and Commercial Workers’ International Union (UFCW) – appear struggling to complement their vocal opposition of the intended deal with tangible action. Which begs the question: Had the coalition any strong case to thwart the deal in the first place or was it just a matter of those with money speaking louder?
The coalition has cited Walmart’s reputation of anti-union tendencies as its main concern. It has argued that the deal would result in job losses and reckons Walmart – the world’s biggest retailer – kills local industries by bullying suppliers to sell goods at cutthroat prices.
However, Pattison says – contrary to fears of job losses – Massmart’s plans to open up to 150 stores over the next three years, which would create between 100 and 500 jobs/outlet opened. Those are plans Massmart hopes to implement more quickly with Walmart on board.
Cosatu first deputy president Tyotyo James says the coalition isn’t discouraged that 97,67% of the 80% voted shares approved Walmart’s offer to acquire 51% of the South African retailer. James is adamant the coalition will bounce back strongly at the Competition Tribunal hearing, the next stage in the deal.