Wal-Mart eyes growth in smaller cities
Print Edition
Wal-Mart Stores is looking to close 15 to 30 underperforming stores in China over the next 18 months but the world’s biggest retailer will continue to expand business in the country, especially in smaller cities.
The number of stores to be closed will account for nearly 9 percent of Wal-Mart’s total outlets in China, but these stores are expected to contribute less than 3 percent of sales in the country, the retailer said in a statement yesterday. It has already closed 11 stores in China.
The US hypermarket giant also said it will open as many as 110 new facilities in China between 2014 and 2016, adding to the 30 it has already opened this year.
Wal-Mart plans to beef up expansion in smaller cities and will develop Supercenter to carry more grocery items and Sam’s Club, the company’s warehouse store arm, according to the statement.
“Wal-Mart is confident in the Chinese market despite many challenges and fierce competition in the country’s retail industry in 2013,” Greg Foran, president and CEO of Wal-Mart China, said at a media briefing in Beijing yesterday.
Hypermarket operators have faced rising pressure in China because consumers shun brick-and-mortar stores in favor of online shopping sites due to cheaper prices of daily necessities and fast-moving consumer goods. Higher labor cost and rent also squeezed their profits.
Last year, Wal-Mart bought a controlling stake in yihaodian.com, one of China’s leading business-to-consumer e-commerce sites, in a strategic move to keep pace with the country’s booming e-commerce market.
Foran said the company will constantly adjust and innovate, such as upgrading merchandise, improving operations and customer experience and setting highest food safety standards, to adapt to the changing market environment.
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