Japanese retailer Seiyu, in which Wal-Mart owns a majority stake, has warned that it expects to post yet another annual loss in 2007.

Seiyu, which runs 400 stores throughout Japan, forecast it would book a net loss of JPY5.9bn (US$49.9m) for the year, after it recorded a net loss of JPY6.9bn for the first six months of 2007.

Despite "steady" food sales and growing customer numbers, Seiyu posted an operating loss of JPY2.2bn. The company pointed to a slowdown in sales of seasonal merchandise such as apparel and consumer durables, as well as sluggish growth of tenant sales. Both factors led to sales dipping 1.4% to JPY461.6m during the first half.

Nevertheless, for the full year, Seiyu expects sales to rise to JPY963m and to be able to post an operating profit of JPY4.6bn.

"We didn't achieve a satisfactory level of performance in the first half 2007, but we see signs of improvement in various parts of our business," CEO Ed Kolodzieski said.

"We will expand our activities in areas where positive results have been produced. At the same time, we will steadily advance our initiatives for improving the operational infrastructure."