Look out Aldi and Woolworths: Huge US supermarket heading to Australia
American retail giant Walmart could soon be on its way to Australia, adding fierce competition to grocery stores such as Aldi and Woolworths.
Coles is soon to be separated and floated on the Australian Stock Exchange by its owners Wesfarmers, which means there is room for change within the retail sector.
Experts believe that Walmart making an investment in Coles would be an opportunity that should not be passed up, as this allows for the American supermarket to make room for itself down under.
Sue Mitchell from the AFR wrote that the merging of UK supermarket Asda with Walmart has freed up billions in capital for the company.
Kevin Moore wrote for Smart Company – an Australian business website, that now is the perfect time for US companies to bring their investments to Australia. With the dollar at its best and the country having a rising employment rate ensures that retail businesses would boom.
Moore believes that it’s only a natural progression for Walmart to move to Australia as it’s a well-regulated market, there is no language barrier, and there are direct flights between the two countries.
Alongside that, the retail chain also has experience with Aldi, who it sees as direct competition.
Another benefit is that tax rates for American businesses have been reduced, which results in big businesses looking at investing in companies that have an established market share and earnings that are attractive enough to shareholders.
With Wesfarmers having 20 per cent ownership of Coles and obtaining a portion of their Flybuys loyalty program, the company will become part of the top 30 listing on the ASX.
Wesfarmers, which is a corporation based in Perth is known for having ownership of multiple farming and mining businesses alongside Bunnings, Officeworks and Kmart.
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