Walmart Could Score Sales Boost From World Cup (WMT, TGT, BBY)

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Walmart (WMT) is the biggest name in shopping, and thanks to its broad global reach it boasts the biggest retail footprints among World Cup competitors – with outlets in eight of the 32 countries competing in the contest. And strangely enough, the big-box store is banking on a correlation between sales in those markets and the performance of the corresponding football clubs. Competitors like retailer Target (TGT) and other grocery store chains are taking notice.

The chief of international marketing at Walmart  recently told Bloomberg he expects same-store sales revenue to go up 2% to 4% in the markets where nation teams make a run deep into the monthlong soccer tournament. Countries whose teams make the World Cup semi-final may see a 1% to 2% jump. Walmart outlets are located in huge soccer-playing countries (or football-playing if you prefer) including World Cup contenders Brazil, Chile, Mexico, Japan, Honduras and Argentina.

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“It’s a television event, and what goes with TV is fresh food, drinks, TV sets, sofas, memorabilia, mugs,” Walmart’s Rick Bendel told Bloomberg. He added that in the U.K., where the recent Walmart buyout of Asda gives it a bigger reach, WMT stock controls the second-biggest supermarket chain and the event could drive “hundreds of millions of pounds” in additional revenue to the company.

The icing on the cake is that Walmart has an exclusive global agreement with a subsidiary of FIFA, the organization behind the World Cup and soccer’s top governing body akin to the NFL for football or the MLB for baseball. This allows Walmart stores to sell memorabilia with the patented term “World Cup” on items such as paper plates and balls instead of producing knock-off products.

Looking forward, Walmart stock leaders are expecting to forge similar partnerships in the future to cash in on global marketing events like the World Cup. The agreement with FIFA is a prime example of how the retail stock is building a foundation for its brand that puts it ahead of competitors like fellow big-box retailer Target (TGT), electronics giant Best Buy (BBY) and other massive retailers.

As of this writing, Jeff Reeves did not own a position in any of the stocks mentioned here.


Article printed from InvestorPlace Media, https://investorplace.com/2010/06/walmart-world-cup-wmt-stock-retail-sales-target-tgt-best-buy-bby/.

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