Wal-Mart plans for the giant Asian economies of China and India were given a strong boost at a time when global sales came in at the low end of expectations.
The retail heavyweight, which boasts more than 5,000 stores worldwide, revealed plans to open 12-15 new stores in China this year in an attempt to play catch up with competitors like Carrefour. The company opened its 46th store in China in May.
The retailer was also optimistic about its goals for the Indian market when, in an interview with the Financial Times, Indian prime minister Manmoham Singh discussed plans to lift limits on foreign direct investment (FDI) "hopefully this year".
John Menzer, president/CEO of Wal-Mart’s international arm, who recently visited India to discuss the retailer’s plans, had said on his return: "It is amazing that India, which has huge retail potential, is under-retailed. We are looking forward to the government relaxing FDI norms in retail. As and when this happens, we will invest significantly here."
Meanwhile, comp sales at Wal-Mart grew by 2.5 per cent – low on its forecast of an increase of 2 to 4 per cent – as demand for groceries remained stronger than general merchandise, which generates slimmer profits.
Speaking at the firm’s annual meeting, CEO Lee Scott also said that the retailer is not selling enough merchandise to high-income customers. He said: "Wal-Mart’s focus will always be on less-affluent shoppers, but we need to widen our appeal to a broader range of customer and that means improving the quality of the company’s household goods and apparel, and improving its consumable offerings with organic and natural food."