I just caught a few seconds of this on the radio this morning regarding a possibility that Wal-Mart might be looking at buying Shoprite. Anyone know any more? I do have shares with Shoprite. Which way do you think the share price could go?
Have a look under "company news". Full article posted over there. At the moment it's just speculation so I don't foresee any major price moves as a result of this. Maybe at a leter stage if there are more facts on the table the situation would need some reassesment. But I would keep holding onto my Shoprite.
Both Shoprite and PnP could be targets as unlike Spar and Woolies they have a very poor centralized distribution centre setup. The oppotunities of applying Walmart's international expertise in DC (distribution centre) management could leverage huge profits. Add to this a world class IT system to manage stock replenishment and Walmart could pay off the purchase price very quickly. Retail head offices make more money out of money management than out of trading (relatvely speaking). That is to say with the ability to replenish timeously and reduce overstocks,(IT systems, reduced stock holding through excellent centralized DC management and effecient on shelf management through category management applications)turning stock over frequently and paying manufacturers on due date, money in the bank is huge. Also bear in mind is that buying a reatil group in South Africain global terms is small change.Whilst RSA is not a huge market it is a desireable aquisition.