Wal-Mart Plans Another Attempt to Win Over Japanese

by Nate Wooley | September 28, 2012 9:31 am

Wal-Mart Plans Another Attempt to Win Over Japanese

Discount retailer Wal-Mart (NYSE:WMT[1]) is planning a 22-store expansion into the Japanese market, The Wall Street Journal is reporting[2]. The new stores will be added to the more than 350 current stores in Japan, one of the world’s largest consumer markets.

The Arkansas-based chain became involved in Japan 10 years ago with their purchase of a minority stake in the Seiyu chain of supermarkets. With subsequent purchases, Seiyu is now a wholly owned subsidiary of Wal-Mart. The chain operates its stores in Japan under the Seiyu name.

Corporate belief is that the increasing number of single and lower-income households in Japan is leading to a greater acceptance of Wal-Mart’s operational philosophy of lower-priced products. The Japanese market traditionally has been skeptical of lower prices, equating them with lower-quality merchandise.

Wal-Mart currently has a 2.6% market share in the Japanese retail market, vs. a 13.4% share[3] of the American market. The chain has more than three times the revenue of chief American competition Target (NYSE:TGT[4]) and Costco (NASDAQ:COST[5]), according to Seeking Alpha[6].

The commitment to Japanese expansion goes along with Wal-Mart’s expansion in other areas. Last week, the company announced that it intended to open stores in India within two years.

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Endnotes:
  1. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  2. The Wall Street Journal is reporting: http://online.wsj.com/article/SB10000872396390443589304577635683490334436.html
  3. 13.4% share: http://co.mmerce.com/retail-online-retail/
  4. TGT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TGT
  5. COST: http://studio-5.financialcontent.com/investplace/quote?Symbol=COST
  6. Seeking Alpha: http://seekingalpha.com/article/532521-wal-mart-vs-target-costco-best-discount-store-stock
  7. Wal-Mart Still a Dividend Stock Worth Owning: http://investorplace.com/2012/09/wal-mart-is-still-a-dividend-stock-worth-owning-tgt-wmt-cost/
  8. Wal-Mart Brings Back Christmas Layaway Earlier, Adds Perks: http://investorplace.com/2012/08/wal-mart-brings-back-christmas-layaway-earlier-adds-perks/

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