Posted on 06/28/2005 2:55:00 AM PDT by familyop
MOSCOW — Wal-Mart, the world’s largest company, wants to expand into Russia, but the retail behemoth is being coy about revealing the timeframe for its arrival.
The retailer is looking at Russia, Poland and Hungary as it continues its expansion in Europe, Wal-Mart CEO Lee Scott told The Financial Times in an interview published Saturday.
“It doesn’t matter to us which of these will be first, we want all of them at some point,” Scott said. “Something could happen next month [or] in six months.”
Wal-Mart’s spokeswoman Amy Wyatt, however, downplayed Scott’s comments. Neither the site of the first Wal-Mart in Russia nor its opening date have been set, Wyatt said by telephone from company headquarters in Bentonville, Arkansas. She declined to confirm earlier reports that a Wal-Mart store would open in St. Petersburg in 2005. “Everyone would win [from Wal-Mart’s arrival], except the competing retail chains,” said Alfa Bank consumer goods analyst Yelena Borodenko.
The entry of the U.S. giant would mark an important vote of confidence for the Russian retail sector. Its expansion would benefit consumers because other retailers would be forced to slash prices to stay in business, Borodenko said.
Wal-Mart operates on very tight margins of 3.6 percent, which is nearly 3 percentage points lower than the comparable figure at Pyatyorochka, Russia’s largest supermarket chain by sales, Borodenko said.
In Central and Eastern Europe, expansion through acquisition is more likely than building operations from the ground up, Scott told The Financial Times.
Local market leaders, such as Perekryostok and Sedmoi Kontinent — the country’s third- and fourth-largest retail chains by sales respectively — would be prime candidates for Wal-Mart’s acquisition, said Marat Ibragimov, an analyst at financial corporation UralSib. Discounters, such as Pyatyorochka and Kopeyka, would be less likely choices because they operate in smaller retail spaces than upmarket chains like Sedmoi Kontinent, he said. Wal-Mart stores range between 16,000 and 18,000 square meters in size.
Borodenko, however, said those local discounters might be attractive buys for Wal-Mart because, like the U.S. giant, they target thrifty shoppers.
After the first Wal-Mart outside the United States opened in Mexico in 1991, the retailer’s international network grew to some 1,500 stores across Latin America, China, Canada, Germany, Britain, Korea and Puerto Rico in less than 15 years.
International sales accounted for 21 percent of Wal-Mart’s $285 billion in total sales last year.
Prolly don't need eminent domain over there.
bttt
Pinging...
Nothing should warm the cockles of our hearts more than to know that the fine rustic folks in Arkansas are bringing the lowest prices (not to mention neighborly goods from friendly China) to our Russian friends.
[Little sardonic humor there.]
Hey, AJC!
Just finished the article; very interesting.
Keep up the good work!
Unions HATE Walmart.
That's why I shop there.
Does that mean I can call you "The Wal-Mart Warrior?"
LOL! ...good idea. Such honorary title should go with purchase of the shares.
But if you own Wal-Mart stock, then wouldn't that be a compliment? Isn't Wal-Mart now a good thing since they are expanding to Russia? Why do you call me that anyway? Is it supposed to be derogatory? If so, then why have you invested in Wal-Mart. Doesn't that make you a "free traitor?" Aren't people who buy stuff from Wal-Mart selling us out to the Chinese?
I don't own any Wal-Mart stock myself. I believe in boycotting Chinese junk.
I learned more about convincing political speech outside of the Army than in it.
I'll continue to shop there, but I look at the labels. ...will buy some foreign items (as there are some Pacific Rim and other friendlies). It's worth having a look at the labels in "mainstreet" businesses, too.
My company binds a union contract book, for a large NJ union, who has it printed by a non-union printer. There are still plentny of union shops for them to choose, but they choose to save a few thousand dollars. I'm quitw sure they all shop in Wal-Mart too.
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