Wal-Mart is an American multinational retail company headquartered in Benton, Arkansas. Fortune magazine ranked No. 1 in the list of the world's 500 largest companies in 2014-2016. Also the world's largest private employer, with more than 2 million employees, is the world's largest retailer.
Wal-Mart in the supermarket is a god-like existence. To put it bluntly, it is a world-class successful supermarket template entity. As a leading boss, naturally as long as there is action, the industry will shake three shakes.
Sainsburys, the UK's second-largest supermarket retailer, confirmed on Monday that it had reached an agreement to merge with Wal-Mart's wholly owned third-largest company in the Asda chain. If the merger is formally approved, Wal-Mart will cash two billion nine hundred and seventy five million pounds directly to continue its global expansion plan, with Australian supermarket giant Coles as the next target.
So far, the only thing we can be sure of is that Wal-Mart is phasing out of the EU market. Wal-Mart, which left the German market as early as 2006, is fully committed to Brazil, and Australia is their next target.
Judith McKenna, head of Wal-Mart's international business unit, said: "this merger and acquisition plan is a rare opportunity that fits very well with our strategic plan to find new ways to drive international business growth."
Australian analysts have done a set of data analysis. Ten years ago, Australia's supermarket market was a period of oligopoly, dominated by Woolworths and Coles. But now, with the appearance of foreign-owned enterprises like Aldi,Costco, this monopoly phenomenon is gradually collapsing.
So it was quickly speculated that, once Coles was separated from its parent company, Wesfarmers, Wal-Mart was likely to buy it first.
The "I've heard that a lot of people have made bold predictions, and if the UK's consolidation is successful, Coles will be the next acquisition target for Wal-Mart.", who worked for Woolworths, Coles and Metash, also sent a tweet on Monday.
Why did the little prince of Coles, who used to bring his halo, step by step down the altar?
Coles was once the main source of revenue for Wesfarmers. A decade ago, a single Coles could feed an entire group, and now cheap department store Kmart, WesFarmers, father of gold, spends 61% of the group's money on Coles, every year, while Coles can bring back just 34% of the group's pre-tax gross profit. Maybe it's so simple and pure that Wesfarmers just said goodbye to Coles.
Is it going to be a good time for Coles to be an independent company?
Now the Australian supermarket oligopoly is gradually collapsing. On the one hand, foreign supermarkets such as Aldi,Costco, under the banner of cheap, grab market share and squeeze profits. On the other hand, e-commerce such as Amazon also want a share of the retail market, Australia's supermarket industry is increasingly competitive.
The golden age of the high-speed growth of Coles has passed. In the current industry, Woolworths and Coles have the same market share of 37.2% and 30.3%, respectively. Aldi is followed by 9.2%.
However, in the new round of customers' most valuable supermarkets, Woolworths remained stable, ranking first (32.2%), Coles second (26.3%) and Aldi third (25.7%). You know, Aldi only accounts for 9% of the market, and it's in just a few minutes.
During the year, success narrowed the distance from second place to a tiny 0.6%. If it can give sustained growth in the above chart, more than Coles is a matter of the near future.
And top-end players like Wesfarmers will really just let Coles go?
According to the divestment plan disclosed by Wesfarmers3 in March, the group will still have a stake in the Coles after the split. Although the specific share has not been disclosed, it will not exceed 20%.
Wal-Mart will really make a bright debut, step on the colorful clouds and marry Coles?
For cash-rich retail giants like Wal-Mart, acquisitions are also the easiest way to access overseas markets directly.
It is easy to see from past cases that Wal-Mart's strategy, whether in Canada, Western Europe, South America, or this time in the UK, has been achieved through acquisitions or joint ventures with local retail giants.
All over the world, only Australia has not been here. But Wal-Mart and the Australian market link has never been broken.
Wal-Mart has been linked to Woolworths in the past. Former Woolworths CEO Roger Corbett worked on Wal-Mart's board for 10 years before Greg Foran, the former Woolworths supermarket chief executive, began operating Wal-Mart's U.S. business in 2016.
Archie Norman, the former chief executive and chairman of Asda, has advised the Wesfarmers Group and Coles for many years and is familiar with Coles's past operations strategy. Chris Nicholas, a former financial director and product manager at Coles, joined Wal-Mart last month.
For Coles, if you could really be a member of Wal-Mart, it would certainly add credit to yourself.
Wal-Mart is better off in its low-cost strategy of winning. Unlike Coles's blind price war, Wal-Mart is obviously more brain-wracking.
They are good at reducing the price of goods by squeezing costs from the purchase channels, marketing costs, and so on. What they can bring to Coles, in addition to funding, is an opportunity for strategic transformation.
Wal-Mart is just taking advantage of the Coles, and return on investment will remain the most important issue for Wal-Mart to consider.
No matter how competitive insider competition is across the Australian supermarket industry, consumers are always more focused on which is the freshest and most affordable. Only to calm down, do real things for the general public, can we go further.