Walmart: The Global Retailer

Wal-Mart: The Global Retailer

Wal-Mart is the world's largest retailer. In fact, it's the world's largest company, with sales last year totaling nearly $220 billion. Of that total, $35.5 billion were from the fast-growing Wal-Mart International Division. Wal-Mart is growing at an incredible clip, both at home and abroad. In the early 1990s, its sales were a little less than $85 billion; it had 2,200 stores and no international division. Today, it has over 3,200 stores, with about 1,100 of them outside the United States. Even though Wal-Mart continues to open stores in the United States, the biggest opportunity for future growth lies in international expansion.

Wal-Mart first "went abroad" to Canada when it purchased 122 Canadian Woolco stores in 1993. By mid-2002, it had 196 stores in Canada, where it was ranked the best retailer and the ninth best company for which to work. Following its move north, the retailing giant turned south into Mexico, using joint ventures and sometimes buying companies outright. Wal-Mart opened its first Mexican store in 1991. By mid-2002, it had opened 66 supercenters, 47 Sam's Clubs, 454 Superama supermarkets, 51 Suburbia Apparel outlets, 245 restaurants under the Vips division, and 110 Bodego units carrying a limited assortment of discount merchandise. In the first half of 2002, sales in Mexico totaled $4.9 billion, and the company announced plans to add 60 new stores in Mexico by the end of 2003. Obviously, Mexico has been a big success for Wal-Mart.

From Mexico, Wal-Mart moved to another Latin market, Puerto Rico. During the next 10 years, Wal-Mart opened 11 more Puerto Rican stores. In 2002 it announced that it would buy Supermercados Amigo, Puerto Rico's second largest grocery retailer. After the purchase, Wal-Mart would have 47 stores and an estimated $1.5 billion in Puerto Rican sales. Sensing a good market, Wal-Mart intended to invest $400 million more in Puerto Rico in the next five years.

Next, it was on to South America. In late 1995, Wal-Mart established stores in Brazil and Argentina. These have been Wal-Mart's most disappointing ventures in the western hemisphere. For one thing, the Argentinean economy is troubled; Argentina's presidency seems to be a revolving door, and inflation is spiraling upward. There's not much Wal-Mart can do about these environmental factors, but it has maintained 11 stores there in the hopes that the economic picture will eventually turn around. The picture in Brazil is a little brighter. There, Wal-Mart has 12 supercenters, 8 Sam's Clubs, and 2 small-format stores called "Todo Dia." Future investment in Brazil may follow the Todo Dia format of 45,000-square-foot stores selling general merchandise. These smaller stores enable Wal-Mart to enter crowded Brazilian neighborhoods where they could never locate a supercenter.

From Latin America, Wal-Mart moved into Asia. Wal-Mart's first stop in Southeast Asia was Hong Kong, where it entered a joint venture with Ek Chor Distribution System Co. Ltd. to establish Value Clubs. Because Ek Chor is actually owned by C. P. Pokphand of Bangkok, Wal-Mart was then able to locate in