Wal-Mart decelerates expansion in China

Wal-Mart decides to curtail its new stores plan by about 30%.

According to data selected by Southern Metropolis Daily, in the first half year of 2012, Wal-Mart opened only 10 more new stores; while in 2011, 43 new stores were opened in a year.

The newly published data shows that in the second quarter of 2012, the gross income of Wal-Mart is 114.3 billion dollar, less than the previously expected 115.8 billion dollar. Though the operating income rose by 12.3% in overseas market, the increase in China is quite small and in Brazil even appears deficit. “Obviously, we walk too fast. We are now in front of ourselves”, said Charles Holley Chief financial officer of Wal-Mart.

Wal-Mart is not the only retail giant that cuts its new stores in China: Carrefour and TESCO are decelerating their business in China as well. On 15 August, one TESCO in Tieling, a northeast city of China, closed down due to deficit, which was reported as the start of the close of more stores.

Foreign retail giants in China are always working as the vane of the industry that their decelerating expansion in China would cause a serious chain reactions of other retailers and downstream enterprises, said DING Liguo, a senior figure in retail industry. “Big supermarket is of low consumption flexibility that what big giants do would greatly affect other smaller retailer.”

“Commercial property is another seriously affected industry as big supermarkets are the main tenants”, added DING, “the expansion slowdown of retail industry would lead to investment crisis for many commercial projects.”