The Invasion of Walmart

[Dave A]

I see there are two stories on News 24 today relating to the Walmart hearing - Commission changes tune & SA could violate trade deals.

I think the greatest concern here should be the way the Competition Tribunal is being used as a political tool.

[Blurock]

The cost of globalisation

Globalisation is good! At least that is what the business schools tell us.
Funny that all these business gurus hail from the good old USA. I used to believe this, until I started adding up the numbers.

Have you noticed how the corner cafes and mom-and-pop neighbourhood businesses are disappearing? SME's are still the biggest providers of employment in this country - not the big corporates! Although a little more expensive than the superstores, they are making a substantial contribution to our economy. You are served with a smile by a member of your own community. The guy at the hardware store could give good DIY advice and would recommend a carpenter, painter etc... Now you shop at a faceless warehouse!

Is it better to go to the mall and buy everything you want from the superstores? Considering that you have to drive there, pay for parking (or a car guard) get frustrated at the tills etc etc .... is it still cheaper?

How many factories have closed due to globalisation? Our non-existent textile industry is a prime example. The machines and equipment have been sold to Pakistan and Bangladesh and the skills are lost forever. The retrenched workers have become a burden to the state which now has to raise more taxes from a smaller tax base.
Consider the cost when next you buy that cheap imported item!

[Justloadit]

You should show this to the unions when they next ask for their yearly increase. One of the reasons we can not sell locally or even export, is because our manufactured cost is too high due to the main part of high labour costs and inefficiencies due to labour related problems.

[msmoorad]

i found this interesting article about Walmarts business practices.
source: http://www.openpr.com/news/175439/Ar...ed-Update.html

openPR) - South Africa has been warned.
A global coalition of organized labor converged this week on Pretoria, South Africa -- where a government office known as the Competition Tribunal is considering a mega-acquisition of MassMart by Wal-Mart that will reboot the retail landscape of an entire continent. MassMart owns roughly 290 stores in 13 African nations, and has been described as "the perfect African entry vehicle" for Wal-Mart.
Queued up against the plan is the Congress of South African Trade Unions (COSATU), in alliance with the UNI Global Union, a worldwide umbrella union representing 20 million workers. They are all part of an Anti-Wal-Mart Coalition which includes the South African Commercial, Catering and Allied Workers' Union (Saccawu), and the South African Clothing and Textile Workers' Union (Sactwu)

One of the most stark statements before the tribunal was presented by Sofia Scasserra, an economic advisor to the Argentine Federation of Commerce and Service Workers (FAECYS). According to Scasserra, Wal-Mart's worst impact was not on wages -- but on the nation's supply chain -- resulting in "a detrimental effect on the business middle class."
Instead of buying products, Wal-Mart de Argentina offers a "sale spot" to suppliers -- who bear the cost of unsold merchandise. "In the event the product sells," Scasserra explained, "the supplier gets paid, but if the product does not sell, then it was deemed never to be Wal-Mart's to begin with, and therefore the supplier bears the full adverse effect of the unsold stock... Wal-Mart does not take ownership of the goods until the product is sold." Scasserra said many companies were forced to close, especially in the food sector, where products are perishable. Some merchants were forced to sell on consignment, putting "immense pressure" on the supplier if goods don't sell.

Wal-Mart also forces supplies to wait at least three months to get paid, and to make matters worse, Wal-Mart uses a trade agreement between China and Brazil to import Asian goods, and then imports the merchandise from Brazil into Argentina protected from tariffs.
All these strategies, said Scasserra, "makes local producers unable to compete." Local apparel makers in Argentina watched as shirts, jeans and underwear poured in from China to Brazil, and then into Argentina through the tariff reduction agreement.
Even when Wal-Mart uses local vendors, "the suppliers are victims of constant pressure to lower the price of their products," Scasserra noted, "with the threat that the company will be better prices by bringing the merchandise from Buenos Aires."
In the case of home appliances, Wal-Mart would force its suppliers to give the retailer discounted and free merchandise, "and it advertises 'unbeatable deals', with the cost of these deals being forcibly absorbed by their suppliers."
Scasserra cited one case where Wal-Mart offered a discount on air conditioners -- without even consulting the supplier. "The first notification that the supplier receives is when they receive a check for less money than they were expecting," she told the Tribunal.
All these anti-supplier policies mean that "small producers are often left out of the equation," Scasserra explained. Wal-Mart cannot be counted on to support "a local sustainable supply chain," she concluded.
Labor relations with many of Argentine's unions were described as "troubled." In one case, Wal-Mart began outsourcing its union workers by laying them off, and hiring new workers from subcontract agencies.
Scasserra advised the South African Tribunal to force Wal-Mart stores to locate in "the outskirts of the city" to protect the "small neighborhood traders and their jobs." She also advised that "group collective bargaining be imposed as a condition," a sort of "centralized table" where workers could bargain with the huge retailer, rather than face fragmented negotiations.
Finally, Scasserra recommended that the policy of allowing a merchant to force the producer to be responsible for unsold products should be banned. Wal-Mart should be obligated to purchase the goods up front, and be limited to 30 days credit.
The American experience with Wal-Mart was also heard in Pretoria. "We have witnessed the devastating effect that the Wal-Mart model has upon small businesses, suppliers, and communities," said Michael Bride of the United Food and Commercial Workers International Union (UFCW). Bride urged the tribunal to "place the needs of South Africa's citizens at the center of its deliberations and ensure that if Wal-Mart does enter the country, that it does so on a basis that will promote economic development rather than destroy it."
For all its high-toned statements about sustainability, Wal-Mart's backroom practices in Argentina should be vivid enough to scare away any nation tempted by the "live better" motto. It shouldn't be too difficult for a 'Competition Tribunal' in South Africa to recognize the MassMart/Wal-Mart merger is the beginning of the end of retailing competition on the African continent.
At least no one can say they were not warned.

Al Norman is the founder of Sprawl-Busters, and the author of The Case Against Wal-Mart.

Kaluss Holdings Limited buy in large quantity and sells in large quantities to our numerous clients in all parts of West Africa Countries. So interested firms may contact Kaluss Holdings Limited directly.

Leading company in importation of general merchandise, to among the leading manufacturers and exporters of your country.
We buy these goods in large quantities and we sell in large quantities.

[msmoorad]

theres too many pros & cons.
i would like to be able to buy the stuff WalMart can offer at the prices they can offer but i cant help feeling guilty after reading more about how they do business.
but we SA consumers have had to pay high prices all along, when will we get a break?

[Dave A]

And our big retailers aren't doing much of this already?

[tec0]

In a way I don’t see this as job creation rather enslavement. Our government predicate that South Africans must consider self-employment. They even give loans to the majority of South Africans to do so. I can’t help but think that this is counterintuitive and goes against our government aim to start with.

Good case and point, employees stopped all work on the new power stations because the people that will eventually receive permanent employment there are NOT South African. This again goes against what was promised “NEW JOBS FOR SOUTH AFRICANS”

The irony… Government promise job creation for South Africans, promote self-employment and yet they aim to higher workers from other countries and allow the biggest competitor to Self-employment in the world to set up shop in South Africa.

It really sound like a bad joke.

[Blurock]

Agreed Dave, All our clothing retailers have a hand in the demise of our textile industry. They all sent buyers to China to source goods, including furniture. Some retailers even have arrangements with local importers and then have the audacity to say they buy from South African suppliers.

The bottom line is the cheap imported goods did not lower the price at the till. It only served to line the pockets of the shareholders as evidenced from 60 -70% increase in the profits of retail chains. The staff also did not share in this windfall as salaries remained static. In some cases management benefited, but mostly shareholders.

I am not a unionist and am also appalled at what is happening e.g. in Newcastle where factories are forced to close because they can not afford to pay the minimum wage. At least the people had work and were earning a living! Where will they be employed now? More welfare cases!

South Africa is a country of contrasts where we have to balance the need to be profitable and competitive with our social responsibilities and militant union demands.
Maybe the answer lies in taking a long term view. Do not go for the fast buck, but in stead create sustainable wealth that can be shared over time. Any one with a magic wand out there?

[Justloadit]

Instead of buying products, Wal-Mart de Argentina offers a "sale spot" to suppliers -- who bear the cost of unsold merchandise. "In the event the product sells," Scasserra explained, "the supplier gets paid, but if the product does not sell, then it was deemed never to be Wal-Mart's to begin with, and therefore the supplier bears the full adverse effect of the unsold stock... Wal-Mart does not take ownership of the goods until the product is sold." ..........

Wal-Mart also forces supplies to wait at least three months to get paid, ...........

"the suppliers are victims of constant pressure to lower the price of their products," .........

In the case of home appliances, Wal-Mart would force its suppliers to give the retainer discounted and free merchandise, "and it advertises 'unbeatable deals', with the cost of these deals being forcibly absorbed by their suppliers."
............

So what is different about Pick & Pay, Checkers, Spar and others?

They do exactly the same, this is the reason I do not even want to consider dealing with them, unless it is COD

Finally, Scasserra recommended that the policy of allowing a merchant to force the producer to be responsible for unsold products should be banned. Wal-Mart should be obligated to purchase the goods up front, and be limited to 30 days credit.

I wish all my debtors did this, oh I forgot, I only have 2 debtors who pay me 30 days anyway, every one else is COD