Rare store sales data highlights Wal-Mart's China challenge
By Adam Jourdan
SHANGHAI (Reuters) - A rare glimpse at figures for a number of Wal-Mart Stores Inc's (WMT.N: Quote) China outlets shows sales slid 6 percent last year, casting a shadow over the firm's target for China to account for a quarter of its global retail growth over the next five years.
The U.S. retail giant doesn't break out its China store sales, but a local joint venture partner submitted filings with the data to a Chinese asset exchange platform as part of a planned sale of minority stakes in 21 Walmart stores. Wal-Mart had 415 China stores at the end of August.
Combined revenue at those 21 stores fell 6 percent to 26.6 billion yuan ($4.2 billion), the data show, illustrating Wal-Mart's challenge to drive sales growth in the world's second-largest economy, where retailers are under pressure from a cooling economy and the rise of shopping online.
The data, released in filings from a unit of state-backed conglomerate China Resources Corp (CRC), show no obvious single factor impacting performance at the stores, which vary in size and age. The 21 stores, located across China from Beijing to far-western Sichuan, employ some 30,000 staff, including more than 20,000 at a single outlet in the southern city of Shenzhen. Wal-Mart says it has more than 100,000 employees in China.
Wal-Mart CEO Doug McMillon this week acknowledged China was a "bit tough", but the world's largest retailer by revenue maintains that in the long-term China is an "exciting, dynamic, large and competitive market".
"As the middle class continues to grow we see an incredible opportunity and we have been putting the pieces in place," McMillon said on an investor call on Wednesday.
Wal-Mart plans to grow its China footprint by nearly a third with around 115 new stores to open by 2017. Continued...