Wal-Mart Stores, Inc. (NYSE:WMT) is set to open 115 new stores all across China by 2017. The move will increase Walmart’s presence in the country by almost a third. The expansion comes amidst a slowdown in the Chinese economy.
Walmart’s CEO Doug McMillon said that he company aims to become an integral part of the Chinese economy and that China is the top priority of the company. The push for expansion comes amidst slowdown in the world’s second largest economy. The company reported a net sales decline of 0.7% for the quarter ended January 31.
The company will be opening new stores to boost sales but at the same time would be closing down some underperforming ones. The company seeks to tap into the country’s fast growing online grocery market through its Yihaodian.com. The platform currently offers up to 8 million products, a far cry from just 18,000 items in 2011.
The new stores will be opened in cities like Shenzhen, Wuhan and Shanghai. The company has not revealed how much it intends to invest in the new stores. The company currently has 411 stores in China according to its annual report. Walmart will remodel up to 50 of its stores this year. The remodelling is estimated to cost around $60 million.
The head of Wal-Mart Asia operations, Scott Price said that he company would be shutting down an unspecified number of poorly performing stores. The company had shut down 29 stores last year. He further stated that there was some slowdown in retail sales. However, the company expanded in the hypermarket channel.
Wal-Mart Stores, Inc. (NYSE:WMT) is not the only one to see a dip in sales. Other retail giants like Carrefour and Tesco have also seen their sales go down. The local rivals are giving stiff competition to the global giants and that is causing the loss of sales.