Wal-Mart's global crusade pays off

By Anita Awbi

- Last updated on GMT

Related tags: Wal-mart

Wal-Mart International has posted a 22.9 per cent rise in
first-quarter net sales to $17.3bn, bolstered by three major
acquisitions during the period.

The world's number one retailer recorded an international operating income of $713m (€555m) for the first quarter ending 30 April, up 6.9 per cent from last year's Q1 income of $667m (€519m).

This was attributed to a major acquisition strategy announced in December, when the US chain outlined plans to extend its international presence and widen its global leadership.

Earlier this year the firm upped its stake in Japan's leading Seiyu retail outfit, with 405 stores, to take a 53 per cent share.

In other moves closer to its domestic markets, Wal-Mart International invested in two Latin American businesses: a majority 51 per cent stake in the Central American Retail Holding Company (CARHCO), and the outright purchase of Brazilian retail chain Sonae.

CARHCO, which has now changed name to Wal-Mart Central America, has a major presence in the region, operating 363 shops in Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica.

Meanwhile, the purchase of Sonae from Portuguese firm Modelo Continente, has made Wal-Mart a challenger for the market leader title in Brazil.

"This latest acquisition by Wal-Mart shows the company is accelerating its expansion plans in South America,"​ said IGD's international analyst Ben Miller.

"The company will now operate 295 units in 17 of Brazil's 26 states, moving Wal-Mart from a distant third place in the country's league of retailers to a real challenger for second,"​ he added.

Wal-Mart's total operating income, including domestic and international, rose 6.3 per cent over the quarter to $2.615bn. US comparable store sales increased 3.8 per cent, with subsidiary Sam's Club registering a 4.3 per cent increase.

For the second quarter, the firm estimates US comparative store sales to increase between two and four per cent.

Meanwhile the retailer will plough on with its global development strategy to open a further 230 international stores in 2006. Also, Wal-Mart Canada confirmed it would extend its stores throughout the year, to offer more non-food ranges.

Currently, Wal-Mart International operates over 2,670 retail units and employs more than 500,000 people in Latin America, Asia and Western Europe.

Related topics: Market Trends

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