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October 29, 2008

US: Wal-Mart to shift capital towards emerging markets

Wal-Mart Stores is to shift more capital toward faster-growing emerging markets in the next five years in a bid to expand its international business.

Wal-Mart Stores is to shift more capital toward faster-growing emerging markets in the next five years in a bid to expand its international business.


Speaking at the two-day analysts and investor meeting yesterday (28 October), the US retail giant said it is focusing spending on building more smaller format stores, on remodels and emerging markets, mentioning in particular, Brazil and China.


“There will be some shift in our capital allocation for the next five years,” said Mike Duke, vice chairman of international operations. “In the last five years, two thirds of our capital went into the mature markets.


“You will see in the next five years more of a shift towards the emerging markets of the world. Those markets like Brazil that we’re really pleased with, and markets like China.”


Duke noted that over the next five years, 53% of the company’s capital allocation will be spent on emerging markets, with the remainder in mature markets.


Speaking at the second day of the conference, Duke said the company is becoming “very aggressive” in remodelling stores in Japan in a bid to improve sales and that the company was open to the idea of merger and acquisition opportunities in the country.


Wal-Mart also said it expects to open its first cash-and-carry centre in India in the first half of 2009. The retailer currently has a venture with India’s Bharti Enterprises for cash-and-carry wholesale operations.

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