Skip to main content

Massmart grocery store ambitions dealt big blow by competition decision

| Legislation

The Competition Tribunal has dismissed a claim brought by Massmart accusing South African grocery retailers of anti-competitive behaviour.

The Tribunal upheld exceptions taken by retailers Shoprite Checkers, Pick ‘n Pay Retailers and Spar in respect of an amended referral by Walmart-owned Massmart regarding its complaint against retailers and landlords for allegedly entering into exclusivity agreements, impacting on its Game stories.

In its complaint, Massmart said it wishes to enter the fresh grocery products market through its Game store chain but cannot do so because of exclusivity agreements between the listed retailers and landlords of Shopping Malls which exclude another chain from selling fresh grocery products.

Massmart first lodged the case with the Tribunal in June 2015.

The three retailers raised various objections to the formulation of the referral. The Tribunal decided to uphold these objections but gave Massmart an opportunity to file an amended referral.

Massmart filed its amended referral on 15 November 2016. The three retailers again excepted to the referral.

In its decision released on Tuesday, the Tribunal found that the problems associated with the referral remained and upheld the objections. However, the Tribunal also found that there would be no purpose served by allowing Massmart an additional opportunity to amend its referral and it decided to dismiss the referral with costs.

Biggest retailers in South Africa

In January, Deloitte published its annual Global Powers of Retail report for 2018, ranking the 250 biggest retail groups across the world – including five from South Africa.

The ranking was based on publicly available data for 2016, covering fiscal years ended through June 2017. Deloitte analyses a company’s performance across geographies, sectors, and channels.

As was the case in 2017, five South African retailers made the list of top retail groups, led by Steinhoff, with Shoprite entering into the top 100.

Because Deloitte’s ranking is compiled on the full-year 2016 data, Steinhoff’s inclusion in the South African rankings does not take into account the recent accounting scandal which has rocked the group, forcing its CEO Markus Jooste to resign.

Steinhoff aside, South African retail groups Spar and Woolworths are also listed by Deloitte as the 27th and 28th fastest-growing retailers among the top 250, with the former achieving a compound annual growth rate of 19.1% in revenue since FY2011, while the latter has seen a CAGR of 18.9% over the same period.

#GroupCountries of operationRetail Revenue FY15 (US$m)Retail Revenue FY16
68 Steinhoff International 31 13 155 13 596
94 Shoprite 15 9 038 10 340
156 Spar Group 11 6 195 6 232
176 Pick n Pay Stores 7 5 436 5 418
191 Woolworths 14 4 518 4 944

Pin It

Related Articles

By: Ahmed Areff - News24 Business Unity SA (BUSA) has confirmed that it will consider legal action after President Cyril Ramaphosa signs the controversial National Health Insurance Bill into law this week. 
By: Siyabonga Mkhwanazi - IOL Mineral Resources and Energy Minister Gwede Mantashe says the Electricity Regulation Amendment Bill will open competition in the market.
As the countdown to the implementation of the new minimum wage draws closer, the nation finds itself at the precipice of a profound transformation in its labour landscape. With revised minimum wage regulations set to come into force on March 1st...
By: Brenda Masilela - IOL The Johannesburg Labour Court has fined Spar director R1 million after he refused on more than one occasion to reinstate a worker who was unfairly dismissed.
The South African Revenue Service (SARS) has published a discussion paper on ways to modernise the VAT collection process.