Wal-Mart is looking to push on into China’s regional cities in 2009 and has insisted a restructuring of its management team in the country would help the business grow.
The US retail giant had earlier moved to quash reports that it planned to cut up to 1,400 jobs across its Chinese operations.
The company told just-food today (16 April) that it was looking to reduce the layers of management at its larger Supercenter stores from five to three.
Wal-Mart, however, maintained the revamp would not lead to job losses but instead free up managers to work at its new stores in China’s “second-tier” and “third-tier” cities.
“This is about eliminating positions, not jobs,” Jonathan Dong from Wal-Mart China told just-food from Beijing. “We have a very robust plan to grow [and] we need managers to work in these [new] stories.”
Dong said Wal-Mart had opened 23 news stores in China during the first three months of 2009. He declined to comment on how many Wal-Mart planned to open throughout the rest of the year but said the retailer had a “very robust” plan.
As at the end of March, Wal-Mart operated 246 stores in China. The country’s economy has slowed amid the global downturn, although it is still expected to grow this year.
Financial analysts IHS Global Insight has predicted that China’s GDP will rise by 6.9% this year – compared to 11.9% in 2007.
Dong said Wal-Mart, like all retailers in China, had seen its traffic affected by the downturn. However, he said food represents 50-60% of Wal-Mart’s sales in China. He added that a series of promotions had also helped drive customers through the retailer’s stores.
“[The promotions] have been really attractive to consumers,” he said.
Dong, however, refused to be drawn on Wal-Mart’s forecasts on its sales in China in 2009.