Wal-Mart international execs toast success

AP News
Posted: Jun 01, 2011 5:33 PM
Wal-Mart international execs toast success

From sweat-absorbing underwear sold in Japan to Will & Kate mugs marketed in the United Kingdom, Wal-Mart on Wednesday offered a taste of the products making the company's $109 billion international business its growth engine.

"Our competition is getting better all over the world," said Mike Duke, president and CEO of Wal-Mart Stores Inc. at a pep-rally style event for about 2,000 associates, including 1,500 store workers who came from 15 countries. "That's why it's so critical to focus on the customer."

The 4 1/2-hour event at a University of Arkansas arena was peppered with speeches from executives representing each of the country divisions, along with tango performers and other entertainment. It was part of a week of events leading up to Friday's shareholder meeting.

Wal-Mart has increasingly turned to its international division to offset a slump in its namesake U.S. business, which has seen eight straight quarters of year-over-year declines for a key revenue measure.

Wal-Mart is exporting its "Every Day Low Price" strategy to stores in Central America and Brazil where it wasn't a practice. Every Day Low Prices means offering low prices across the entire store, not temporary deep price cuts on selected items.

The event occurred a day after regulators approved Wal-Mart's $2.4 billion bid to buy a controlling share of South African chain Massmart Holdings, after a fierce debate over protectionism in the country with the continent's fastest-growing economy. Grant Pattison, CEO of Massmart, took the stage briefly.

"Wal-Mart is going to Africa," Doug McMillon, president and CEO of Wal-Mart's international division, yelled to a cheering audience.

Wal-Mart's international business now accounts for 26 percent of company revenue, which reached $419 billion in its fiscal year ended Jan. 31. In its fiscal first quarter, Wal-Mart's international revenue rose 11.5 percent, compared with a 0.6 percent increase at its U.S. namesake business.

Mexico, Chile and China showed the biggest gains, but all countries had shown increases, with the exception of Japan, hurt by the earthquake, tsunami and nuclear disaster, the company had reported last month.

Executives told associates Wednesday that the goal is to double Chile's revenue to $10 billion by 2018. And Wal-Mart is hoping to capitalize on China's huge Internet population. One in four Internet users globally live in China, said Ed Chan, CEO of Wal-Mart China.

There was even good news coming from Japan, whose economy is still recovering from the earthquake, tsunami and nuclear crisis. Toru Noda, CEO of Walmart Japan said that the 24 stores in the affected Sendai area had a 20 percent revenue increase in May.

Rivals, aiming to take advantages of merchandise shortages, raised their prices. Wal-Mart said it stuck with its low prices across the store.

But tales of hot-selling merchandise ruled the event. Executives from the Wal-Mart's U.K. ASDA chain talked about how the wedding of Prince William and Kate Middleton offered plenty of merchandise opportunties that it took advantage of, including a knockoff royal engagement ring. About 30,000 sold at $5 apiece.

ASDA also cited 10,000 Kate & Will mugs that were also sold in recent months. Executives from Wal-Mart's Seiyu division cited the popularity of Ecosara _ underwear that absorbs sweat, ideal for Japan's hot summer, which averages in temperatures of the mid-80s.