American retail giant Walmart could take over Australia’s Kmart department store chain within five years, millionaire businessman Dick Smith predicts.
The founder of the Dick Smith Electronics chain claimed the world’s largest retailer, owned by the Walton family, would offer to buy Kmart from its Perth-based parent company Wesfarmers before savagely cutting costs.
‘They’ll take Kmart, that will go first, in the next four or five years,’ he told Daily Mail Australia on Thursday.
The prediction comes after Walmart’s U.K. subsidiary Asda merged with Sainbury’s, freeing up capital for the retail juggernaut to invest in a wealthy nation like Australia.
American retail giant Walmart could take over Australia’s Kmart department store chain within five years, millionaire businessman Dick Smith predicts

He predicted the world’s largest retailer, owned by the Walton family, would offer to buy Kmart from its Perth-based parent company Wesfarmers before savagely cutting costs
‘They have to keep growing and the only way they can really grow now is by taking over other businesses and they’ll be able to do incredibly well here,’ Mr Smith continued.
‘They will do that without any doubt because they have to have endless growth.’
Mr Smith predicted Walmart would 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.’
CMC chief markets strategist Michael McCarthy said Wesfarmers would happily offload Kmart to Walmart.
‘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.’

Electronics chain founder Dick Smith said Walmart would buy Kmart and sack thousands of staff
Dick Smith predicted Walmart would later make a bid for either Woolworths, which bought out his now defunct electronics chain in 1982, or its supermarket rival Coles.
‘Walmart will come and take over either Coles or Woolworths and then Aldi will take over the other,’ he said.
Such a scenario would see privately-owned German-owned supermarket giant Aldi and Walmart, based at Arkansas in the American deep south, own both of Australia’s supermarket giants.
Coles’s parent company Wesfarmers is preparing to spin off its profitable supermarket brand into a separately-listed corporation to compete with Woolworths.
Both supermarket chains are now Australian-owned but Mr Smith said two northern-hemisphere predators could soon own both, which would lead to even cheaper food sourced from overseas.
‘The board and president of Walmart will be on the threat of dismissal unless he or she just has endless profits and in the end you can’t get an increase in profits by opening more and more shops, you have to take over existing businesses,’ Mr Smith said.

Coles has been earmarked to be demerged and floated on the Australian Stock Exchange as a separate company by its owner Wesfarmers
The merger of Walmart-owned U.K. supermarket chain Asda with its rival Sainburys has freed up billions in capital for Walmart.
The Australian Financial Review’s Sue Mitchell this week predicted that could lead to Walmart making a bid for Coles.
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 ASX.
America’s corporation tax rates have also been reduced by the Trump Administration, prompting big corporations to look at investing in companies with an established market share.
Once demerged, Coles would become a new top 30 listing on the ASX with Wesfarmers planning on retaining a 20 per cent ownership of the supermarket giant.
Michael McCarthy from CMC Markets said that while Walmart wasn’t a supermarket specialist, Coles would be a better buy than Kmart in Australia.
‘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.’
Wesfarmers’s full-year net profit after tax fell by 58.3 per cent to $1.197 billion in the year to June 30, as the expansion of hardware chain Bunnings into the U.K. market flopped.

Australia is a natural fit for the retail chain with a well-regulated market, no language barrier, direct flights, and already having gained experience competing with Aldi on their home turf
Wesfarmers is a Perth-based conglomeration with substantial farming and mining businesses which also owns hardware chain Bunnings and Officeworks.
In the 12 months to the end of last year Woolworths had a 32.2 per cent market share of the grocery sector with Coles just behind at 28.8 per cent, Roy Morgan market research said.
Aldi trailed behind with a 12.1 per cent share while IGA, owned by Metcash, had a 7.4 per cent share.