Walmart China strategy: 110 new stores

Wal-Mart Stores Inc CEO Michael Duke, left, and Walt-Mart China CEO Greg Foran visit one of the chain's hypermarkets in China in Oct 24, 2013.[Provided to China Daily]

Wal-Mart Stores Inc said they will open up to 110 new stores over the next three years, with many locations at second and third tier cities and a focus to invest in its distribution centers and remodel existing stores.

"China is a key strategic market for Walmart," President and CEO Mike Duke said during a press conference in Beijing on Thursday. "Our management team is committed to continued growth in large and smaller cities across China, and doing it in the right way."

Greg Foran, Walmart China president and CEO, said their focus in China in the future is investment and development, and stressed that quality should take precedence over quantity as the company grows in China.

"We adapt to market changes by making adjustments and innovations, and we will modify our operations in China by upgrading the merchandise as well, especially in fresh food and grocery," he said. "We will improve operations and customers' experience, establish best-in-class food safety practices, and eliminate unnecessary costs in order to build an even stronger business."

Foran said the company will open more stores, including in tier-three and tier-four cities, with expansion focused on supercenters and Sam's clubs.

The retailer will open two Sam's Clubs in Hangzhou and Suzhou this year, bringing the total number of Sam's Clubs in China to 10 and expects to open more in the next three years.

Foran said that Sam's business model is ripe for the burgeoning middle-income, upper-income consumers.

The retailer aims to remodel about 45 stores this year, 55 next year and 65 during the following year. The remodeling process is to improve store operations and customer in-store experience by optimizing the sales floor, improving parking and access, and increasing the energy efficiency of facilities.

Walmart will also invest in more distribution centers as a long-term strategy and enhance their strength of the logistical network. By the end of next year, all stores will have access to ambient and chilled distribution networks, (I think that should be plural, if the ambient and chilled distribution network is actually 2 networks. If it's 1 network, then take the "s" out of networks) said Foran.

The company has closed stores that have not performed competitively, representing up to 9 percent of their total store portfolio and 2 to 3 percent of their total sales volumes through next year.