Editor's Note: Can Walmart succeed in South Africa's competitive retail landscape?

As Walmart opened its first South African store at Clearwater Mall in Johannesburg and its second in Fourways Mall it enters a retail battlefield already dominated by some of the country’s most deeply entrenched supermarket brands: Shoprite, Pick n Pay, Boxer, Woolworths, and Spar.

Shoprite is currently the reigning giant in retail land and with its Sixty60 online offering is eating its competitors lunches although Pick n Pay is trying hard to turn its fortunes around. 

Walmart’s much-publicised Every Day Low Prices philosophy might sound good on paper, but in South Africa, price wars are nothing new. Local players have honed the art of affordability and loyalty across decades of economic turbulence, social diversity, and consumer nuance that even a global retail giant may find difficult to decode.

The Local Loyalty Challenge

Shoprite and its Checkers division have built a retail empire by mastering the needs of South Africa’s broad income spectrum. Shoprite understands the psychology of South African shoppers in a way that no newcomer can replicate overnight. Its loyalty programs, savings initiatives, and consistent presence have made it almost synonymous with everyday essentials.

Woolworths, by contrast, has cultivated an almost aspirational brand — one that blends quality, trust, and social consciousness. Its emphasis on sustainability, local sourcing, and superior service has made it the retailer of choice for the country’s high net worth individuals. Woolworths shoppers are loyal not merely because of price, but because of identity. From the sounds of it Walmart is going for a lower end income bracket of consumers so won't compete with the much loved Woolies brand. 

Pick n Pay under CEO Sean Summers has come out swinging on the affordability front, offering a greater variety of specials and rewards making it a retailer to look out for. Boxer, which listed on the JSE at the end of 2024, might offer stiff competition to Walmart with its mass discount offering and low prices.

And then there’s Spar. With its franchise model and focus on neighbourhood integration, Spar offers consumers the compelling offering of convenience. 

A Global Giant, But a Local Stranger

Walmart’s Clearwater store promises “a world-class shopping experience” — bright aisles, efficient checkouts, and a mix of local and international products. That may impress first-time visitors, but South Africans have grown accustomed to sophisticated retail experiences. Both Woolworths and Checkers have invested heavily in premium store design, private label innovation, and seamless online platforms. In short, the bar is already high. 

My kids dragged me to see the Clearwater store as they were excited to see the difference from other retailers. To me it was a lot like Game but with a heavier emphasis on food. It was fun spotting the American sweets, which came at a hefty price tag. The store was very well run. 

Walmart’s arrival in South Africa has long been shadowed by its earlier acquisition of a controlling stake in Massmart — a move that went South. Massmart could not turn its profits around, so the market will be keeping a close eye on how Walmart rolls out its new stores in South Africa.

Global giants while being feared, do not necessarily have a handle on the local South African market. It was with much fanfare that amazon.com announced it was launching online in South Africa. Commentators and experts alike all were concerned that the move would cut into local retailers e-commerce offerings like Takelot and so on. So far it has been a bit of a damp squib with very little market disruption so far.  

South Africa is not the United States. It’s a complex blend of developed and developing worlds, where consumers are price-sensitive but brand-loyal, yet value-driven. Economic inequality shapes shopping habits in profound ways. Even the concept of “low prices” must contend with transport costs, township economics, and community-based shopping traditions that global retail strategies often overlook. I have been told that in America it is the sheer wholesale dynamic that leads to low cost prices on the shelves, but Walmart does not have the same playfield in South Africa to leverage that advantage.

To succeed, Walmart must do more than import its American playbook. In South Africa every rand counts and for a new kid on the block it faces hot competition that is rapidly innovating. The real test will be how low their prices can go while still remaining a going concern.  

But if Walmart believes that low prices alone will win South African hearts, it may find itself surprised by how loyal customers can be and with ingrained shopping routines and behaviour. Clearwater Mall might mark a bold beginning, but the real test will come when Walmart tries to win over a shopper deciding between their trusted go to retailer — each already deeply woven into the fabric of her/ his daily life.

Philippa Larkin is the exective editor of Business Report.

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