The excitement is cooling off at Wal-Mart
Wal-Mart announced on Thursday that it would be scaling back its rate of expansion in China over the next three years, as it plans to open 100 stores between now and the end of 2015.
Wal-Mart Stores Inc, which is the world’s largest retailer in terms of sales, has 378 stores and over 100,000 employees in China to date, and previously had been opening stores at a rate of 50-60 stores per year.
Speaking in Beijing last week, Mike Duke, president and chief executive officer of Wal-Mart, said that the company will prioritize large-store formats, such as hypermarkets in China, and its members-only stores, known as Sam’s Club. The company said that its current expansion plans will create 18,000 jobs in China over the next three years.
China’s hypermarket sector is booming, but competition has become fierce, with international retailers struggling against low-priced local competitors. Wal-Mart was a pioneer in the China market, but now faces much greater competition from Britain’s Tesco Plc , Germany’s Metro AG , France’s Carrefour and local companies such as Sun Art Retail Group.
The hypermarket sector reached sales of RMB 506.9 billion last year according to Euromonitor.
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