Walmart can take over South Africa with a nuclear option

Acquiring Pick n Pay would be the nuclear option for Walmart to bridge the gap with Shoprite in South Africa and immediately become a big player.

Walmart entered South Africa in 2011 when it acquired a 51% controlling stake in Massmart, which owned Makro, Game, Builders Warehouse, and DionWired.

Despite the strong retail brands under the Massmart umbrella, the company struggled with sluggish economic growth in South Africa and internal operational hurdles.

It closed all DionWired stores in early 2020 and faced severe challenges in making Game a profitable retail chain.

In 2022, Walmart delisted Massmart from the Johannesburg Stock Exchange (JSE) and bought out the remaining 49% of the company it didn’t already own.

The United States retail giant’s solution to Game’s problems became apparent when it converted the first Game outlet to a Walmart-branded store in late 2025.

Walmart will continue converting underperforming Game stores into Walmart-branded stores to boost its market presence in South Africa.

It has already earmarked 20 Game locations in Gauteng, the Western Cape, and KwaZulu-Natal to become Walmart-branded stores.

This shows that Walmart believes its Every Day Low Price model will work in South Africa and that expanding its local footprint is a good strategy.

The retailer has also launched a 60-minute delivery service specifically designed to compete with established local players like Checkers Sixty60.

It is clear that Walmart is targeting players like Checkers and Shoprite with lower prices on a wide range of products.

Many comparisons have shown that Walmart offers lower prices on a basket of products than Checkers and Shoprite.

However, this may not be enough to take on South Africa’s entrenched retail giants, like Shoprite, Pick n Pay, and Spar.

They have a massive physical footprint with established relationships and distribution channels, which will take years to create.

Pick n Pay could be an acquisition target for Walmart

When Walmart first considered entering South Africa, Shoprite was the most attractive option due to its scale and efficient operations.

However, Christo Wiese, Shoprite’s controlling shareholder, was not keen, and he showed Walmart the door.

Former Shoprite CEO Whitey Basson, who was Walmart’s primary point of contact at the time, realised they faced a significant threat.

If Walmart were to buy Pick n Pay, which, under its CEO Sean Summers, did very well, it could make its life very difficult.

“I planned to get Walmart off our back and prevent them from buying Pick n Pay, because that was my biggest fear,” Basson said.

“So, I talked to the Walmart team for almost two hours to convince them that Makro [and therefore, Massmart] was their best option.”

His plan worked exactly as planned. In 2011, Walmart bought the majority stake in Massmart, which owned Makro and Game.

“Thank heavens they didn’t buy Pick n Pay. That would have been a major problem,” Basson said in an interview.

Although Walmart missed out on Pick n Pay through a shrewd manoeuvre from Basson, this option may be back on the table.

It should be noted that there is no indication that Walmart is considering buying Pick n Pay. However, some top analysts suggested that it may become an option.

John Biccard, portfolio manager at Ninety One Value Fund, told Financial Mail that Pick n Pay being acquired by Walmart is not far-fetched.

He believes that ‘Walmart may be more serious about expanding its South African presence than its current Game store footprint suggests’.

Biccard said that Pick n Pay, with hundreds of stores in prime locations, could be an attractive acquisition target for Walmart.

“It’s not the reason we bought it [invested in Pick n Pay], but it obviously is a factor,” he told Financial Mail.

Pick n Pay is an attractive investment

Pick n Pay is an attractive acquisition target because of its relatively low share price and its large stake in Boxer.

On Thursday, 14 May 2026, Pick n Pay traded at R21.00 per share, giving it a market cap of approximately R15.72 billion.

Boxer, in which Pick n Pay owns a 65.59% stake, has a market cap of R40.81 billion.  This means Pick n Pay’s stake is worth nearly R27 billion.

This means that the market sees Pick n Pay as being worth negative R11 billion, which makes it an attractive investment.

A company can offer Pick n Pay shareholders a premium of 50% to acquire the retailer, unbundle the Boxer stake, and still get Pick n Pay stores for free.

Acquiring Pick n Pay would be the nuclear option for Walmart to bridge the gap with Shoprite in South Africa and immediately become a big player.

Pick n Pay has hundreds of stores in prime locations. It occupies the most valuable retail space in shopping malls and neighbourhood hubs across South Africa.

Walmart could use this extensive retail infrastructure to rapidly deploy its global Every Day Low Prices strategy in South Africa.

Buying Pick n Pay will allow it to bypass the years of losses typically associated with building a new retail brand from the ground up in a competitive market.

Pick n Pay’s Smart Shopper, which has millions of members, also means Walmart can use its global AI and data infrastructure to supercharge this programme.

Walmart would inherit a decade of South African consumer purchasing data, which they could plug into their global supply chain systems to optimise stock and pricing.

The American retail giant, which is a global leader in omnichannel retail, could further use Pick n Pay’s existing delivery fleet to create a true threat to Sixty60’s dominance.

Pick’n Pay’s recent struggles and low valuation, therefore, make it attractive to a cash-rich giant like Walmart if it wants to rapidly expand in South Africa.

This is an opinion piece by Daily Investor’s editorial team.