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Wal-Mart set to expand by Dec

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Foreign direct investment in multi-brand retail still not allowed, global giant Wal-Mart now plans to have more cash-and-carry wholesale outlets in India by year-end.

The United States-based retailer’s sourcing and merchandising operations from India had also improved and are on a sound footing.

Wal-Mart had entered India in a joint venture ar­rangement with Bharti India in the cash and carry wholesale segment and single brand retail where 51 per cent foreign direct investment is permitted.

“We had announced at the time of entry into India that we plan to open 10 to 15 cash-and-carry stores over next three years. However, we now plan 10 to 12 new best price modern wholesale stores and employ approximately 8,000 to 9,000 people by December 2011,” senior vice-president, Bharti Wal-Mart , Arti Singh told Financial Chronicle.

“When we made the joint venture announcement in August 2007, we gave ourselves a window of 18 to 24 months to get things in place. We faced many challenges su­ch as spiralling cost of real estate and under-developed supply chain operation. Yet, we remain firmly on track,” the company spokesperson said. He was responding to queries on regulatory issues the company faces in expanding its core retailing business in India.

At present, Bharti Wal-Mart has six best price modern wholesale cash-and-carry stores catering to other retail businesses across Punjab, Rajasthan and Madhya Pradesh. Wal-mart invests around Rs 0.7 crore for each of its stores and had opened its first store in Amritsar in 2009.

Citing supply chain as a major impediment, Wal-Mart said it seeks to focus on a number of areas with their suppliers for its merchandising and sourcing operations.

“The Bharti Wal-mart business revolves around creating and managing an efficient supply chain that will result in savings for our members (suppliers) and ultimately customers. This includes working wi­th our suppliers to remove inefficiencies in areas such as packaging, stock control, management, inventory, and so on,” she said.

The Bentonville (Ark­ansas)-based company already has a major sourcing business in India, and stands ahead of $ 125 million a year, mostly from merchandisers in Punjab, comprising of cotton and textile goods. Indian products reach out to other Asian countries, Europe and even the United States.

So far, the largest retailer on the planet has fallen short of its target number of outlets in India and had sought allowing foreign direct investment in multi-brand retail.

– Financial Chronicle

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