Walmart Looks to Private Brands, Sam’s Club to Bolster Its Foothold in China

24/7 Wall St.

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While Wal-Mart Stores Inc. (WMT) already has plans to open two additional Sam’s Club outlets in China in the coming year, its China chief, Greg Foran, said he hopes to increase that rate each year until there are 10 new Sam’s Club stores per year in the next six or so years.

Foran was named president and chief executive of Walmart’s China division in February 2012, as the company contended with increasing competition and China’s ever more Internet-savvy customers. Foran may be feeling the pressure as his honeymoon period comes to an end.

Walmart, the world’s largest retailer by sales, hopes to bolster its foothold in China. Local rivals have stepped up their game in the past few years, outpacing Wal-Mart both in sales and in numbers of stores. So far, the Bentonville, Ark., retailer has focused mostly on rolling out Walmart-branded stores. But focusing on Sam’s Club is intended to help offset a traffic decline that has plagued Walmart stores in China for the past several years. Sam’s Club has largely avoided that traffic trend.

Foran also wants to slash prices online to better compete, as well as increase the selection of imports and private-label goods. However, Walmart’s image as the retailer that offers the lowest prices has been a tough sell in China. Private label goods account for 1% of sales in the nation, but Foran says that he plans to increase the number to 20% in the next seven to 10 years. Also, Sam’s Club will expand its imported products fivefold in the next year.

The plans also call for making it easier for shoppers to combine their online and offline shopping, helping them compare prices from both and pick up their online purchases in stores.

Walmart shares were inactive in premarket trading Wednesday. They ended Tuesday at $77.25, in a 52-week range of $67.37 to $81.37.

Filed under: Retail Tagged: WMT

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