(BEIJING) Giant U.S. retailer Wal-Mart Stores Inc (WMT.N) plans to expand its footprint in China by nearly a third by opening 115 new stores by 2017, the firm’s chief executive said, in a renewed push to lure China’s grocery shoppers despite slowing growth.
“Our aim is to become an integral part of China’s economy,” Chief Executive Doug McMillon said at a news conference in Beijing on Wednesday. “China is a top priority.”
The development plans come as the U.S. retailer seeks to stave off slower growth in China, closing some under-performing stores and giving more emphasis to the faster-growing online grocery market through its Yihaodian.com platform.
McMillon said he was excited by e-commerce growth prospects in the country. The Yihaodian.com platform offered 8 million products at the end of 2014, up from just 18,000 items in 2011, he said.
The company said it would open the 115 new stores in cities such as Shanghai, Shenzhen and Wuhan between 2015 to 2017, creating more than 30,000 jobs, without disclosing how much it would invest in building the new outlets. It had 411 stores in China at the end of January this year, according to its annual report.
Wal-Mart also plans to invest more than 370 million yuan ($60 million) to remodel more than 50 stores this year. McMillon also said the company would ensure the highest quality suppliers, reinforcing its focus on food safety after it announced a 300 million yuan investment in food safety management last year.
The Bentonville, Arkansas-based retailer’s new push in China comes as global grocery firms face increasing challenges in the world’s second-biggest economy. Wal-Mart in February said that its China net sales declined 0.7 percent, with comparable same-store sales falling 2.3 percent, for the quarter ended Jan. 31.
Wal-Mart, France’s Carrefour SA (CARR.PA) and Britain’s Tesco PLC (TSCO.L) have all seen sales growth slip over the last five years, losing market share to local rivals, according to a report published on Tuesday from consumer analytics firm Kantar Worldpanel.
Average same-store sales dropped into negative territory last year, according to an analysis of six major grocers by consultancy OC&C.
Tesco, U.S. retailer Best Buy Co Inc (BBY.N) and Britain’s Marks and Spencer Group PLC (MKS.L) have all taken a hit in China over the last couple of years, scaling back operations or exiting the country.