US retail Walmart is racing to capture South Africa’s grocery market with 60-minute delivery
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For years, Walmart has been in the business news and we have seen its influence behind the scenes at Makro and Game. But the giant has finally stepped out from the shadows expanding in South Africa, promising a total of 21 news stores.
With the first official Walmart-branded stores now open in Gauteng (at Clearwater and Fourways malls) and plans to trek into Cape Town and Durban, the American retail king is officially taking on our local legends: Checkers, Pick n Pay and Shoprite.
But for the average South African shopper, already a pro at "cherry-picking" specials across three different apps, the big question is: Will you make Walmart part of your everyday lifestyle or are you more likely to stay with what you know?
The timing of this "Retail War" couldn't be more critical. We don't need reports to tell us how hard it is to make ends meet, we see it every month when our salaries do not stretch to cover our everyday needs.
However, if we are looking for reports - they do show that low-income households are spending over 40% of their income just on basic necessities. With electricity prices soaring by nearly 70% over the last five years and fuel costs remaining volatile, the "pain at the pump" has moved into the pantry.
We are certainly feeling the squeeze, and our brand loyalty is being tested by our bank balances.
Whether it’s the lure of American private-label snacks we’ve only seen in films (the stores stock specific imported items like Reese's, Dr Pepper and Sour Patch Kids) or just a cheaper bag of rice, South Africans are looking for a lifeline. I know some of us are looking forward to try them out and bring down our grocery bills.
While there was some good news for shoppers in February with the latest Household Affordability Index released on Monday by the Pietermaritzburg Justice and Dignity Group (PMBEJD) showing a slight decrease the Household Food Basket, prices are still higher year on year.
Walking into one of the new South African Walmarts feels a bit like a mashup, say those who have tried it out up north. It has the tech-heavy vibe of a Game store, they say, and the massive variety of a Makro but without the "bulk-only" requirement.
And the big blue signage brings a new philosophy to Mzansi: Every Day Low Prices (EDLP).
Unlike Checkers or Pick n Pay, which thrive on the "High-Low" model, where you wait for that one massive "buy 3 for R50" special, Walmart aims to keep prices consistently low every day.
In a recent basket comparison, a standard nine-item grocery run (essentials like maize meal, oil and milk) was found to be much cheaper at Walmart than at almost all local competitors, unless those competitors were running a specific promotion.
South Africans are famously loyal to what works, and nothing has worked quite like Checkers Sixty60.
It changed the game, turning "doing the groceries" into a 60-second thumb workout and in many cases from order to delivery is sometimes down to 15 minutes!
And every time we run a heartwarming story about a Sixty60 delivery team it goes viral. Those teal bikes and their drivers carry a soft spot in our hearts.
But Walmart isn't coming to the party empty-handed.
They’ve launched their own 60-minute delivery app, leveraging their global tech to try and out-speed the teal bikes we see on every corner.
While local experts argue that Walmart lacks the deep distribution network that Shoprite spent decades building, the global giant is banking on its massive scale and "American-style" efficiency to bridge the gap. Added to that they promise to have the brands locals love.
South Africans are a nation of savvy savers. We know which store has the cheapest meat, which one has the freshest rolls and which one delivers the fastest.
Walmart’s entry is however a wake-up call for our local giants to keep their prices sharp and their service sharper.
In a country where every Rand is being stretched to its breaking point, value is the only currency that may matter in the end.
Let’s see how Walmart - rolling out 21 stores - fares with a loyal but hard-hit consumer and whether it will become part of our lifestyle just like Sixty60.