WALMART INSIGHT DECK
Growth markets and strategic initiatives
December 2013
planetretail.net
1
STEPHEN SPRINGHAM
Senior Retail Analyst
Contents
1. Planet Retail View
2. Overview
3. Major Strategic Initiatives
4. Key Markets
5. Further Reading
2
All data correct at time of publishing.
2. Overview
Corporate Structure - Walmart International
The International division is structured around three geographies (EMEA, LATAM, Asia).
Walmart International
Doug McMillon
President & CEO
Asia
EMEA
Latin America
David Cheesewright
Enriqué Ostalé
Scott Price
President & CEO,
Walmart EMEA
President & CEO,
Walmart Latin America
President & CEO,
Walmart Asia
Canada
Mexico
Shelly Broader
Scot Rank
President & CEO,
Canada
President & CEO,
Walmart de México & Central America
Sub-Saharan Africa
Grant Pattison
President & CEO,
South Africa (Massmart)
UK
Andy Clarke
President & CEO,
UK (Asda)
Middle East
Greg Foran
President & CEO,
China
Brazil
President & CEO,
Brazil
Japan
Steve Dacus
Horacio Barbeito
President & CEO,
Japan (Seiyu)
President & CEO,
Argentina
Chile
Franchised George stores.
China
Marcos Samaha
Argentina
3
A new head of International will be appointed to
take office from 1 February 2014, when McMillon
steps up to become President & CEO of Walmart.
India
Gian Carlo Nucci
Ramnik Narsey
President & CEO,
Chile (D&S)
President & CEO,
India (interim)
4. Key Markets
The long tail: the US is nearly nine times larger than Walmart’s second
biggest market, the UK. Some 15 markets have sales of less than USD1 billion.
Walmart: Total Banner Sales by Market, 2012 (USD bn)
400
Banner Sales (USD bn)
350
“[Internationally] The majority of revenue and
profit comes from our operations in the UK,
Mexico and Canada.”
346.48
300
CHARLES HOLLEY
250
Walmart EVP, Chief Financial Officer
(March 2013)
200
There is a distinct ‘Top Tier’ among the
International businesses of the UK,
Mexico and Canada...
150
…Brazil, Japan and China form a notional
‘Second Tier’ (sales >USD10 billion)….
…South Africa, Chile and Argentina form
a notional ‘Third Tier’ (sales >USD3
billion). Only a further three markets
(Costa Rica, Puerto Rico, Guatemala)
achieve sales of USD1 billion or more.
13.29
12.81
11.25
7.90
7.06
3.15
Brazil
Japan
China
South Africa
Chile
Argentina
100
39.28
50
29.38
26.19
0
US
4
UK
Mexico
Canada
Chart features the Top 10 Walmart countries by size and excludes markets with sales less than USD3 billion.
Source: Planet Retail
4. Key Markets
Walmart: Canada SWOT
STRENGTHS
 Canada is one of Walmart’s longest-established international markets.
 Supercentres have had a significant impact on the Canadian grocery
market. Already the second-largest retailer overall, Walmart will
challenge Loblaw for market leadership.
 Geographic proximity to US has enabled almost seamless deployment of
EDLP and supply chain practices.
 Global scale and lean cost structure enables Walmart to better absorb
inflationary pressures compared to its domestic rivals.
OPPORTUNITIES
 Further conversions/upgrades of discount stores to Supercenters
(around 170 discount stores remained trading at the 2013 fiscal
year-end).
 Further organic expansion of Supercenters in under-represented
region (e.g. the Maritime Provinces in the east).
 Introduction of smaller-box formats - Neighborhood Market or
Express - to mirror its strategy in the US.
 Possible acquisitions of smaller rivals.
WEAKNESSES
 Walmart took longer than expected to become a success.
 Target entered the market early in 2013 and is expanding aggressively.
 Failure of Sam's Club in Canada has left something of a bitter taste.
 Although Target has struggled to achieve its performance targets since
entering Canada, it is nevertheless intensifying competition in the nonfood sector.
 Grocery merchandising, although improving, still lags behind
Sobeys and Loblaw.
 Heavily exposed to GM, many sub-sectors of which are suffering weak
consumer demand.
 Absence of a smaller format gives competitors such as Sobeys an
advantage in targeting the convenience/urban segment.
 Poor reputation in union/labour relations.
5
THREATS
 The grocery market is subject to ongoing consolidation (e.g. Sobeys’
takeover of Safeway’s Canadian stores) and competitors are therefore
becoming larger.
 Walmart could over-expand in its efforts to head off Target’s incursion
into Canada.
 Unionisation.