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It looks like the massive American retail giant, Walmart could be coming to Australia in a move that may wipe out our local chains, according to retail experts.

Millionaire businessman Dick Smith predicts that Walmart could take over Australia’s Kmart department store chain within five years, as reported in the Daily Mail.

The Dick Smith Electronics chain founder said that the world’s largest retailer could make an offer to purchase Kmart from its Perth-based parent company Wesfarmers.

‘They’ll take Kmart, that will go first, in the next four or five years,’ he told Daily Mail Australia.

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This speculation follows the merger of Walmart’s U.K. subsidiary Asda with Sainsbury’s, which effectively freed up capital for them to invest in a new market.

Walmart Eyeing Coles For Takeover

It has also been suggested that Walmart may also be eyeing Coles as the platform to enter the Australian market. This follows Westfarmers intention to demerge Coles and float in on the Australian Securities Exchange as a separate company.

What Is Walmart?

Walmart is an American retail chain specialising in discount department and grocery stores. It is famous for selling a massive variety of merchandise and has a catalogue of over 120,000 different products.

This includes the weird and wonderful from bacon-scented pillows and pickle-flavoured ice blocks, powdered peanut butter and jelly bean-flavoured milk to peanut butter and jam sandwiches in cans. Walmart also sells firearms, which won’t be permitted locally.

Kmart Staff Could Be In Trouble

Dick Smith predicted that Walmart’s first move within Australia would be a drastic cost-cutting exercise.

Smith said Walmart may sack Australian Kmart staff and offer cheaper prices by retrenching staff.

‘Walmart, they are completely ruthless,’ he said.

‘The Walmart formula is sack people. Don’t share the wealth, sack people.

‘That’s what they’ll do here.’

It’s A Rumour But Could Happen

CMC chief markets strategist Michael McCarthy said Wesfarmers would happily offload Kmart to Walmart, even though sales volumes increased by eight per cent during the last financial year.

‘That’s strictly in the rumour category but nonetheless, we couldn’t rule it out,’ he told Daily Mail Australia.

‘This is their sort of business.

‘Both Wesfarmers and Wesfarmers shareholders would be delighted if they find a buyer for Kmart – the variety store format has been under pressure for an extended period and a graceful exit from Kmart would be applauded.’

McCarthy said that while Walmart wasn’t a groceries specialist, Coles would be a better Australian buy than Kmart.

‘The steady earnings that come from the grocery business are attractive to a number of global investors,’ he said.

‘It’s a little removed from Walmart’s main business but a pure grocery play in the global context does make more sense for a group like Walmart.’

A Complete Shakeup Of Australia’s Retail Scene

Dick Smith further predicted that Walmart would later make a bid for either Coles or Woolworths, which bought out his now defunct electronics chain in 1982.

‘Walmart will come and take over either Coles or Woolworths and then Aldi will take over the other,’ he said.

No Confirmation Yet

Walmart has not made any announcement about buying Kmart, Coles or Woolworths.

Wesfarmers by law would be required to disclose such an offer to the Australian Securities Exchange.

Wesfarmers managing director Rob Scott said he has ‘no awareness’ of Walmart looking to buy Coles or Kmart.

  • You need to know your prices you normally pay. e.g. some things are cheaper at Costco, some aren’t and a few are more expensive. Don’t forget you need to pay a membership fee to Costco and you need to take that into consideration. Is it worth the extra km you have to travel to one?? Their fuel (members only) is cheaper than other cheap fuel outlets. I think Target is going to struggle too.

    Reply

  • If they do buy it out, not only could jobs be lost but the profits will go back overseas and not stay in Australia. Here’s hoping it doesn’t happen.

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  • I think this would be a great thing- if it means that we get cheaper prices and not more expensive prices aimed at an Australian market who already pay more than the rest of the world for everything. Our retail sector needs a shake up!

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  • Interesting to see how this plays out. It would be a shame for jobs to be lost, and do we really need more Costco-type stores? Let’s see.

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  • Wow, big call. Let’s see how things play out.

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  • why change Australia to be like America?

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  • I hope this does not happen, no, no, no.

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  • Why are American retail giants uberhaupt welcomed in Australia ? Not a good thing I think !

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  • Why can’t Australia stay the same I don’t understand why everyone wants to make Australia like America America is America and Australia is Australia

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  • If this does happen it better be like Kmart . Cheap prices and in a lot of places just like Kmart is now or they won’t be seeing me in their store.

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  • Speculation by a man whose major retail company went out of business. If he was that good at speculating, he never would have lost his business.

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  • Nooooo I love Kmart.

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  • This doesnt come as a surprise.
    I doubt it would be exactly like walmart in the US.
    As Australia has different laws eg no guns or bullets would be sold due to our laws.
    I think it would be great for the community to have a centre that stocks everything.


    • Our laws and controls are quite different – so it would be different for sure – if it does occur?

    Reply

  • KMart needs a shake up. Their store design means that the disabled have a lot of problems accessing it & it is always untidy/cluttered. I gave up trying to shop in KMart because of their horrible store design forcing shoppers to go through a maze to pay for the items. Definitely not wheelchair friendly, bring on Walmart!

    Reply

  • I for one hope it never happens here. The image Walmart has in the USA is not a good one. I hope that the places here are taken over by Australian companies who respect our way of life.

    Reply

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