by Burke Speaker | April 8, 2014 10:45 am
Walmart (WMT) announced plans to open some 50 wholesale stores in India in the next five years — adding to the 20 already there.
The stores sell directly to retailers as opposed to customers.
“We are taking a number of important steps to strengthen compliance so that we do the right thing every day,” Scott Price, Wal-Mart’s Asia chief executive, said in a statement. “We are evaluating and reinforcing procedures and programs relating to all compliance areas, including licensing and permits, food safety, and responsible sourcing among others.”
Wal-Mart’s growth in India has been slowed by an internal bribery probe, uncertainty over regulations on foreign investment in the country, and in October, the severing of its partnership with New Delhi-based Bharti Enterprises.
India allows full foreign ownership in wholesale stores and under a 2012 law change allows up to 51 percent foreign ownership in supermarkets. Wal-Mart, which had been the most vocal foreign advocate for opening up India’s large but fragmented retail industry, has not yet applied to open retail stores in the country.
The reason for this is due to India’s upcoming elections, in which different parties are arguing for limits on the retail involvement of foreign companies.
In addition to the openings of the wholesale stores, Walmart will launch online operations to sell to smaller India traders.
India’s laws forbid foreign retailers selling online goods directly to customers.
WMT stock is down 1.25% year to date.
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