Woolworths not losing sleep over Walmart
Fin24 - Dec 12th 2011, 09:47
Johannesburg - The chief executive of Woolworths Holdings [JSE:WHL] isn't worried about losing market share to Walmart in Africa, as he targets the continent's rising wealth with fashionable clothing and high-end food.
With its focus on the millions of newly rich Africans, Woolworths may see more competition from Spain's Zara rather than the budget US retailer, Ian Moir said in an interview with Reuters on Friday.
"I don't sleep at night but it's not Walmart that's keeping me up. They don't really compete with us, they are a good business and they will change the dynamics in the marketplace, but we're less affected than others," he said.
"Zara coming in is going to have more direct competition with us than Walmart, but they are not going to come in with big volumes and they would not take material market share."
Similar in style and products to Britain's Marks and Spencer Group, Woolies has long been a staple for South African shoppers. It is now aggressively ramping up its presence on the continent, drawn by surging incomes in some of the world's fastest-growing economies.
It aims to double its African stores outside South Africa to 120 by 2014, Moir said. Target countries include Nigeria, Uganda, Mozambique and Kenya.
"Africa is still a relatively small percentage of our business - it's about 3% of out turnover, and will become 10% of our turnover in time," he said.
Woolworths, which claims to be one of the world's largest users of organic cotton, is planning to sell clothing, not food, outside South Africa.
Walmart Stores, the world's largest retailer, earlier this year paid $2.4bn for a 51% stake in South African retailer Massmart, and has said it plans further expansion in Africa.
Retailer Zara, a label of Spain's Inditex, opened its first African store this year in Sandton.
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