Walmart reaffirms China plan
Walmart plans to accelerate development in China by opening up to 110 new stores over the next three years.
The plan calls for developing further in second-, third- and fourth-tier cities, and will create nearly 19,000 new jobs, it says.
“China is a key strategic market for Walmart and we are very well positioned to serve the country’s emerging middle class with great products they can trust,” said Walmart global CEO Mike Duke.
“Our management team is committed to continued growth in large and smaller cities across China, and doing it in the right way. Our investments in new stores, innovation, and retail supply chain will create jobs and support China’s plans for growth.”
Greg Foran, Walmart China president and CEO, also emphasised Walmart’s focus in China in the future is investment and development, and stressed that quality should take precedence over quantity as the company grows in China.
“In 2013, the retail industry faced challenges and strong competition, but Walmart’s confidence in the Chinese market has never been stronger,” Foran said.
“We adapt to market changes by making adjustments and innovations, and we will modify our operations in China by upgrading the merchandise we sell, especially in fresh food and grocery. We will improve operations and customer experience, establish best-in class food safety practices, and eliminate unnecessary costs in order to build an even stronger business,” he added.
Walmart also hopes to open more Sam’s Clubs in China in the next three years. Foran said that Sam’s outlook is promising, that this business model is especially ripe for the burgeoning middle-income and upper-income consumers, and because many cities are well-suited for this format, the growth of the Sam’s Clubs in Walmart China’s portfolio will be strong for years to come.
The US retailer says that while it undertakes expansion plans, it will also close some non-performing stores. This week it confirmed 25 poor performing locations would close.
“These closures represent up to nine per cent of our total store portfolio, but only two to three per cent of our total sales volume through next year. Taking this action is appropriate and enables us to continue to grow in China,” said Foran.