Wal-Mart Stores has put expansion in India on hold as, in the wake of bribery allegations, it seeks to ensure applications for new store locations meet local regulations.
The US retail giant owns the Best Price Modern Wholesale cash-and-carry chain in India. The world’s largest retailer took full ownership of Best Price last month after buying out venture Bharti Enterprises, the Indian conglomerate.
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At present, there are 20 Best Price Modern Wholesale stores in India but, according to local reports, no new outlets have been opened for a year, since the former Bharti Wal-Mart venture suspended employees while it investigated alleged violations of US bribery rules.
With Wal-Mart now fully owning the wholesale chain, industry watchers are looking at when the retailer will add to the business.
Reports in India have suggested Wal-Mart will not open any more stores until 2015. Asked to confirm these claims today (27 November), a spokesperson for Wal-Mart India said: “We are in the process of implementing additional controls for our new store permit and licensing programme to ensure the process is handled appropriately and in full compliance with all laws and regulations. As we develop and implement enhanced procedures for obtaining licences, there have been some temporary delays in store openings. We are making progress in this regard, and our goal is to resume opening stores in the right way.”
It is unclear if the investigation into the alleged violations of the US Foreign Corrupt Practices Act has ended. Wal-Mart India did not respond to a request for further comment on this matter.
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By GlobalDataWal-Mart has also yet to open consumer-facing stores since India last year eased its regulations on foreign investment in multi-brand outlets. Industry watchers claimed foreign retailers including Wal-Mart had expressed concern the changes did not go far enough. In August, India moved to ease conditions it had placed on the new rules governing overseas investments.
Wal-Mart has not commented directly on the latest changes. However, announcing the end of its venture with Bharti last month, it said: “Walmart is committed to businesses that serve our members and provide good returns for our shareholders, and we will continue to advocate for investment conditions that allow FDI multi-brand retail in India.”
