After+Early+Errors,+Wal-Mart+Thinks+Locally+to+Act+Globally

After+Early+Errors,+Wal-Mart+Thinks+Locally+to+Act+Globally...

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« Back to Document View Databases selected: Wall Street Journal After Early Errors, Wal-Mart Thinks Locally to Act Globally Miguel Bustillo . Wall Street Journal . (Eastern edition). New York, N.Y.: Aug 14, 2009. pg. A.1 Abstract (Summary) It has estimated it will spend up to $5.3 billion on foreign expansion projects in the fiscal year that began Feb. 1. [. ..] that figure doesn't include its splashiest new move, the acquisition of a controlling stake in Chile's largest grocery chain, Distribucion y Servicio D&S SA. Wal-Mart's international division already includes some 3,700 stores and provides nearly a quarter of the company's $401 billion in annual sales. Full Text (1954 words) (c) 2009 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission. SAO PAULO -- Having powered its way to the top in U.S. retailing, Wal-Mart Stores Inc. has struggled to extend its dominance across the globe. But the world's largest retailer is learning in Brazil and elsewhere that the most successful ideas don't necessarily flow from its headquarters in Bentonville, Ark. That has it tailoring inventories and stores to local tastes -- and exporting ideas and products pioneered outside the U.S. Traffic-choked Sao Paulo, for instance, proved inhospitable to the kind of vast stores with which Wal-Mart dominates in American suburbs. At the same time, the local-market savvy of Brazilian retailers that Wal-Mart acquired has proved invaluable. "What we have learned in the past couple of years is that one size does not fit all," says Anthony Hucker, a British retail veteran now tasked with taking winning Wal-Mart store formats and expanding them globally. Wal-Mart's challenge abroad is to cater to local tastes for native products that are not popular elsewhere, while still making the most of the global purchasing might that lets its squeeze down its costs. Finding new frontiers for expansion has become crucial for Wal-Mart. The company reported nearly flat second-quarter earnings Thursday, including a 1.2% decline in sales at U.S. stores open for at least a year. But Wal-Mart said it notched a significantly stronger performance abroad. The company estimated its foreign unit posted a 13% rise in profits for the quarter and a 11.5% increase in sales, if currency fluctuations are taken out of the equation. And though Wal-Mart's stock rose smartly last year, as its low prices appealed to recession-strapped shoppers, it has slid 7% in 2009 on skepticism about how well it will prosper when the economy and consumers bounce back. The big retailer has been gradually boosting its international spending in recent years, even as it reduces overall capital expenditures. It has estimated it will spend up to $5.3 billion on foreign expansion projects in the fiscal year that began Feb. 1. And that figure doesn't include its splashiest new move, the acquisition of a controlling stake in Chile's largest grocery chain, Distribucion y Servicio D&S SA.
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This note was uploaded on 12/31/2009 for the course BIZ 178 taught by Professor Meford during the Fall '09 term at Berkeley.

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After+Early+Errors,+Wal-Mart+Thinks+Locally+to+Act+Globally...

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