Wal-Mart to branch out into smaller cities

Wal-Mart Stores Inc, the world's largest retailer by revenue, announced Monday a plan to open about 30 new outlets in China, mostly in second-tier cities, in 2013, after recent media reports about its closure of three stores in major cities.

Wal-Mart has already opened two new stores this year in two second-tier cities: Sanhe, North China's Hebei Province and Bazhong, Southwest China's Sichuan Province. It will soon be opening two Wal-Mart superstores in Shenzhen and Dongguan, South China's Guangdong Province, as well as two new Sam's Club stores in Hangzhou, East China's Zhejiang Province and Suzhou, East China's Jiangsu Province, the US retailer said in a press release Monday.

In the next 6 months, store openings will take place in seven more smaller cities in a total of six provinces in North, East, Central and South China, including Xinyu in Jiangxi Province and Tianmen in Hubei Province, the firm said.

"We will continually improve our operational efficiency, reduce costs, and lower prices of our products so that they are more affordable for consumers," Wal-Mart China's CEO Greg Foran said in the press release, noting it remains committed to "open more than 100 new stores in the next three years."

The retailer announced the closure of three superstores in Shanghai, Shenzhen and Wuxi within a week, news portal 163.com reported Wednesday.

"Wal-Mart's 'everyday low prices' strategy has become increasingly difficult to pull off in the face of rising operating costs in big cities, so they have to turn to second-tier cities, where the investment environment is conducive to an emerging retail industry," said Wang Xian­qing, director of the Circulation Economics Research Institute at Guangdong University of Business Studies.