Boston, MA 10/15/2013 (wallstreetpr) – Wal-Mart Stores, Inc. (NYSE:WMT) has announced that it will host its annual conference for the investor community today. The meeting with cover all the three operating segments of Wal-Mart – Walmart US, Walmart International and Sam’s Club. Analysts and investors will be asking some questions regarding its plans for growth in the domestic market and the break up of its partnership in India.
Wal-Mart has seen a decline in sales at Wal-Mart US since the last two quarter after six quarters of sales growth. This segment contributes nearly three-fifths of the total revenues of Wal-Mart. It has 4000 plus stores with annual revenues of $275 billion last year. Wal-Mart has also cut its annual outlook and the remaining two segments have disappointed. The macroeconomic condition is already causing worry lines as it comes just ahead of the peak holiday season.
The retail giant is looking at emerging markets since quite some time for growth in revenues and profits. The company had formed a partnership with a telecom giant in India for setting up retail chain. The Indian government has also announced measures to liberalize Foreign Direct Investment (FDI) in the retail sector after facing a political storm. The terms were not found favorable by Wal-Mart. The central issue was the caveat that 30% of the goods sold must be procured locally. Wal-Mart operates a vast and efficient global supply chain to ensure least cost purchase of goods, so that they can be sold at lowest prices in its stores. In fact the least cost challenge is its main unique selling proposition (USP). Adhering to the 30% cap could have lead to inefficient purchases, it felt. It called off the partnership but also indicated that they were not even thinking of exiting from India. Wal-Mart will have to scout for a new partner to run its 20 wholesale stores as foreign investments rules require a local partner with 49% equity participation.
