Walmart redefines meaning of growth in China
Less than two weeks after announcing plans to reduce overall international capital expenditures, top Walmart executives were telling a different story in China this week.
At a press event in Beijing, Walmart CEO Mike Duke and Walmart China CEO Greg Foran said the company planned to opening as many as 110 new facilities during the next three years including stores in China’s smaller cities while also closing up to 9% of its 397 units and remodeling 165 stores.
Walmart characterized the moves as accelerating the company’s development in China even though the announcement comes less than two weeks after Walmart told investors overall international growth and capital expenditures during the coming year would decline or be flat.
According to Walmart China president and CEO Greg Foran, 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."
Foran joined Walmart International as an SVP in October 2011 and in February of 2012 he was named CEO of Walmart China.
The Chinese announcement follow the release of revised 2013 international expansion plans and a 2014 forecast earlier this month. Walmart Internatinal originally planned to add between 20 million and 22 million square feet of selling space during the current fiscal year. However, that figure was slashed to 14 million and for next year total international square footage growth is expected to be in a range of 12 million to 14 million square feet.
The big reduction in 2013 international growth saw the capital expenditure budget shrink by $500 million to a range of $4 billion to $4.5 billion while next year’s budget amount is at the same level.