Walmart Adds $7 Billion Through Acquisition in 2011

RetailNet Group recently updated its Walmart forecasts for the UK, Africa, and Asia. This, of course, is the first year that there is an Africa forecast, as the Massmart acquisition was finalized in June 2011. Asda’s acquisition of 193 Netto stores in the UK also closed in Q2 2011. These acquisitions added nearly $7 billion to Walmart’s top line in 2011 ($4.7 billion to ‘reported’ top line—RNG does not allocate partial-year sales).

Read on for highlights of Walmart’s activities in these regions, along with key growth platforms.

United Kingdom

As previously mentioned, Walmart’s Asda subsidiary closed the acquisition of 193 Netto stores in April of last year. The company was forced to divest 46 of these by the Office of Fair Trading, and ended up converting 137 of these stores to the Asda Supermarket format by the end of the year. Asda converted about 8 stores a week in 2011, as it only took 2 weeks per store. See the time lapse video of one of these conversions below:

Asda Supermarket is one of the company’s key growth platforms going forward, and will account for a huge majority of unit growth over the next few years.

Source: RNG Database; USD cst. 2012

Overall, RNG forecasts that Asda will grow sales at a 4.1% compound annual growth rate (CAGR) from 2012-2016, an impressive performance in a saturated retail market which has recently fallen back into recession.


Perhaps the biggest development in Walmart’s 2011 was its acquisition of major South African retailer Massmart. At the time of the announcement, Massmart was the 4th largest retailer in South Africa, behind ShopRite, Pick N Pay, and Spar. This is without the company having a grocery format; its two food-selling formats are cash & carry–Cambridge Food and Makro–and largely cater to business customers.

While the conventional wisdom was that the transfer of knowledge would be a one-way street, from Walmart to Massmart, Walmart may well take ideas from Massmart. Massmart’s DIY formats, a new area for Walmart, are a “concept [that] could be taken into emerging markets such as Brazil, but could work in Canada too”, according to Don Frieson, Walmart’s lead integration executive in South Africa. Frieson also said he could see Dion Wired, Massmart’s electronics chain, as a possible stand-alone or store-within-a-store in the US.

In Africa, Massmart will continue operating under its own brands—“Massmart powered by Walmart”. Going forward, expanding food formats is the company’s main initiative. Mass merchandise stores Game are being converted to mini hypermarkets Game Foodco, and the Cambridge Food format is being expanded rapidly. It’s not hard to see why Walmart targeted Africa; the continent is growing rapidly in both population and GDP. While it is Walmart smallest geographic region in terms of scale, it will lead in growth rate over the next 5 years.

Source: RNG Database; USD cst. 2012


Asia has historically been Walmart’s most difficult environment. The company left South Korea in 2006 and has failed to achieve the same kind of success in China and Japan as it has had in the Americas and the UK.  2011, however, provided better-than-expected results, and RNG has upped its forecasts for Walmart’s growth in the area.

Walmart has expanded its supercenter rapidly in China, both organically and through its acquisition of Trust-Mart. RNG expects this trend to continue going forward, with the format increasing from 328 stores in 2011 to 498 in 2016, adding nearly $7 billion in sales. Meanwhile in Japan, the company’s meager 0.2% growth in 2011 beat RNG’s expectations, and we now forecast Seiyu (Walmart’s Japanese subsidiary) to grow at a 1.2% clip from 2012-2016, helped by its expanding online business.

Walmart’s last Asian market, India, is its smallest in terms of sales outside of the small African markets in which Massmart operates. Due to Foreign Direct Investment (FDI) restrictions in India, Walmart is prohibited from operating its own stores in the country. Instead, Walmart has formed a joint venture with local operator Bharti Retail. As part of the agreement, Walmart provides supply chain management operations and technical support for Bharti’s Best Price Modern Wholesale cash & carry stores and Easy Day super and hypermarkets. The joint venture had opened 15 Best Price by the end of 2011, and RNG forecasts this number will reach 40 by 2016.

Source: RNG Database; USD cst. 2012

RNG subscribers can access our full coverage of Walmart on our site. Features include forecasts for all the banners it operates in all the countries it operates, analyst reports, investor presentations, news articles, and RNG insight. Stay tuned next week for RNG’s take on top retailer’s Q1 2012 gratis en espanol para descargarкредит кредитной картойцвета фирменного стилякогда в танзании сезон дождейпокорение килиманджарокредиты онлайн на банковскую карту без отказатанзани¤ тур ценакак закрыть кредитную карту альфа банкапарк нгоронгоротанзани¤ заповедник нгоронгоротуры на кипр в маеAhmedabad escortsкерамическая сковорода москва купитьпутевка в австрию на 5 дней

About Nate Holmes

Nate is a Research Analyst with RNG, and he’s responsible for the forecasting work and analysis covering Ecommerce as well as the global Big-Box retailers such as Hypermarkets and Warehouse Clubs. His area of specialization is in the Digital / Innovators space. Nate’s geographic focus under the STEIP market analysis framework is North America.

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