Walmart

US retailers missing out on huge market potential

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Walmart is very cautious about entry to Russia, but is potentially missing out on vast profits in a country that is home to a population of 140 million.

Walmart has possibly missed on 30% worth of growth that is currently being enjoyed by Russian retailers.

Consumers in Russian cities have basically embraced the western model or retail nowadays, but this is not yet the case in more remote areas.

This is not likely to change quickly as infrastructure is not in place for such an expansion. This is leading to intensified competition in the urban areas, which means that the longer companies like WalMart leave it to make their entry, the harder it will be to make an impact.

“Now there is more risk, but more return,” said Alexei Krivoshapko, director at Prosperity Capital Management, one of the biggest investors in Russian stocks with $4 billion under management. “Later there will be lower returns, more cash for entry, but less risk because it will be about buying a mature business.”

WalMart could also see competition from other foreign retailers if it tries to buy a local player in Russia, with accession to the World Trade Organization in 2012 making Russia’s import-heavy retail sector even more appealing for international players by simplifying the import process.

Source: Freshplaza

Wal-Mart sees promise in Russia, X5 denies deal

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U.S. retail giant Wal-Mart, which has flirted with entering Russia for years, still sees promise in the vast country, and will continue to look for the right opportunity, it said in a statement on Wednesday.

Its comment followed a report in St Petersburg-based Russian magazine “Delovoi Peterburg” that it is in talks to buy the Karusel hypermarket chain from X5, Russia’s top food retailer by sales. The report said that a deal may be announced in around two weeks.

Analysts estimated such a deal could be worth $2 billion. An X5 spokeswoman said: “We deny these reports categorically.”

Wal-Mart has looked at Russia for years but appeared to have given up in December 2010 when it closed its Moscow office due to a lack of acquisition opportunities.

It reawakened speculation it was still interested in Russia when it hired Lev Khasis, the former head of X5, as a senior vice president in September 2011.

A research report by analysts at Uralsib said X5 could ask around $2 billion for the hypermarkets which “would provide quick entry to Russia for Walmart.”

Source: www.reuters.com

Walmart plans its Russian return

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When Walmart left Russia empty-handed in December 2010 – 8 years after it first began exploring the market and 3 years after it had opened a Moscow office – it appeared that the world’s largest retailer had finally met an emerging market it could not crack.

Today the company has already laid the initial groundwork for its return, hiring one of the leading figures in Russian retail to help manage its emerging markets division.

Lev Khasis, former chief executive of X5 Retail Group, Russia’s biggest retailer by sales, has started as a senior vice-president at Walmart, where he will be focusing on the companies’ existing emerging market operations, in countries including Brazil, India and China.

Mr Khasis stressed in an interview that his appointment did not indicate Walmart would immediately rush back into Russia, but said the company would continue to look at the market carefully, waiting for the right time and the right acquisition.

Source: www.freshplaza.com

Wal-Mart Hires Lev Khasis

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Wal-Mart Stores hired Lev Khasis, former head of food retailer X5, as a senior vice president and chief leverage officer, a spokeswoman for the company said Thursday, an indication that Wal-Mart has yet to abandon plans for an entry into Russia.

Wal-Mart appeared to have given up in December, when it closed its Moscow office due to a lack of acquisition opportunities.

Khasis, who grew X5 by acquisition into a Russian market leader with $11 billion in annual sales, left the company in March after five years. The Wal-Mart spokeswoman said Khasis would be based at the company’s headquarters in Bentonville, Arkansas, reporting to international chief executive Doug McMillon.

Source: www.themoscowtimes.com

Walmart cashes out of Russian Retail

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Walmart is not the only major international retailer to pull out of Russia in recent years after failing to establish a viable business in the country. In October 2009, French retail giant Carrefour announced it was pulling out after opening just one shop in Moscow and another in the southern city of Krasnodar.
The discount retail sector in Russia, where Walmart operates, is severely underrepresented.
There are only two international hypermarket chains, Auchan and Real, operating in this sector, so the market is certainly not saturated. Walmart International CEO Doug McMillon said that Walmart will continue to pursue market entry opportunities

Source: en.rian.ru