For Wal-Mart, the world’s largest retailer, the last few years have not always been smooth sailing. U.S. same-store sales growth have been slow, and efforts outside the United States have sometimes been problematic.
Now, Wal-Mart has suffered a significant setback with regard to its efforts in India, the second-most populated country in the world.
As reported by Gardiner Harris for the New York Times:
“Wal-Mart Stores gave up on India’s huge market on Wednesday October 9, announcing that it had indefinitely delayed its once-ambitious plans to open hundreds of superstores across the country. The announcement adds to the gloom enrobing the Indian economy. Growth has slowed sharply and the value of the rupee has fallen starkly in recent months. It also suggests that the government’s efforts to lure more foreign investment are failing, but the governing United Progressive Alliance’s plan has never been popular with India’s politically vocal retailers.”
“Wal-Mart also announced that it was ending its joint effort with Bharti Enterprises of India to operate 20 wholesale ‘cash and carry’ stores that sell to other businesses like retailers, hotels, and restaurants. Wal-Mart plans to buy Bharti’s 50 percent stake in the venture, and the two companies will operate independent businesses in India. That Wal-Mart kept the wholesale business, long seen as a way to learn about India’s fragmented retailing sector, suggests it has not entirely ended its hopes of eventually selling at a retail level.”
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A Bharti-Walmart store in Chandigarh, India, photo by Saurabh Das/Associated Press