Wal-Mart has said that it will expand by more than 25 per cent in China and renovate existing stores in a bid to reverse sales declines after a series of food scares and accounting missteps.
The world’s largest retailer plans to add 115 stores and spend 370 million yuan ($60 million) renovating about 50 of the more than 400 it currently has in China, Wal-Mart said in a statement. The new stores will create about 30,000 jobs, according to the statement.
“China is a key strategic market for Wal-Mart,” chief executive officer Doug McMillon said at a briefing in Beijing. “Over the next three years, we will increase investment across our diverse business operations in China.”
Wal-Mart said that the 115 new stores include both its supercentres and Sam’s Clubs, and it plans to open seven of the members-only stores over the next two to three years. It will also introduce an app to allow shoppers to buy items through their phones and pick up their purchases or get them delivered.
Wal-Mart was the third-largest hypermarket retailer in China in 2014, with 10.6 per cent of market share, behind French retailer Auchan and China Resources Enterprise, according to data by Euromonitor International. Sun Art Retail, backed by Auchan, operates hypermarkets in China under the Auchan and RT-Mart brands.
Wal-Mart’s China operations engaged for years in some unauthorised sales and accounting practices that made business appear strong, despite a slowdown in retail transactions and a rise in unsold inventory, according to employees and internal documents, Bloomberg reported in December.
The company has also beefed up its food-safety checks after facing incidents such as fox DNA being found in donkey meat, and in February it announced that it would assign a veteran employee to a newly created post in China, with the goal of improving the retailer’s reputation after accounting, inventory and food-safety missteps.
Bloomberg News, edited by ESM
