Wal Mart in INDIA

al-Mart to invest USD 5.3 bln in global dominance

UNITED STATES
Monday, August 24, 2009, 16:30 (GMT + 9)

US chain of convenience stores Wal-Mart plans to spend USD 5.3 billion to modify its commercial strategy and adapt itself to the particular tastes of consumers around the world.

The company will take on this expansion initiative after registering nearly null second-quarter earnings for the year, including a 1.2 per cent decline in sales at US stores.

In contrast, its international unit posted a 13 per cent rise in profits for the quarter and a 11.5 per cent increase in sales during the same period, The Wall Street Journalreports.

The millions in investment, however, do not include the spending required by the acquisition of a controlling stake in Chile's largest grocery chain, Distribucion y Servicio D&S SA, the company clarified.

Wal-Mart's international division already possesses some 3,650 stores and generates nearly 25 per cent of the retail giant’s USD 401 billion in annual sales.

Yet company executives are more ambitious: they stepped up spending in China, struck a retail alliance in India, are exploring possibilities in the Middle East and planning a move into the Russian market soon.

Although many stores abroad carry the Wal-Mart name, the company also uses some 60 other brand names, often those of local retail chains it has acquired.

In Brazil, a market Wal-Mart entered in 1995, the retailer now builds small discount stores catering to the emerging middle class, but under the name Maxxi, rather than the US chain’s name.

Executives estimate the Brazil operation has been tallying near-double-digit year-over-year profits, in the midst of a global recession, which exceeds the 6 per cent overall growth of the Brazilian retail market.

Another case is that of India, where Wal-Mart and its local partner, Bharti Enterprises Ltd., launched a store for small merchants called Best Price Modern Wholesale.

Meanwhile, in China, the chain has more than 250 stores, and is expanding with help from a discount supermarket concept called Smart Choice, which is identical to the Todo Dia convenience-store format in São Paulo.

Similarly, in the south of the country, Wal Mart is testing two smaller store formats like Mas Club and Supermercado de Walmart – success stories of Wal-Mart Mexico – that cater to Latin American immigrants, Infobae reports.

Some days ago, the retail chain announced plans to develop a worldwide sustainable product index to promote greater quality and lower costs.

“Customers want products that are more efficient, that last longer and perform better. And increasingly they want information about the entire lifecycle of a product so they can feel good about buying it,“ said Mike Duke, Walmart’s president and CEO.

“They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way,” explained the executive during a meeting with 1,500 of its suppliers, associates and sustainability leaders.

Related article:

- Wal Mart develops 'sustainability product index'

By Analia Murias
editorial@fis.com
www.fis.com

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