Walmart 2000 Annual Report Download - page 13

In Mexico, Wal-Mart operates
seven different retail formats.
Most of these relate to the
1997 acquisition of a controlling interest in
the leading Mexican retail conglomerate,
Cifra, which is now Wal-Mart de México.
Wal-Mart operates 397 Cifra outlets in
Mexico, in addition to 27 Wal-Mart
Supercenters and 34 SAM’S Club stores.
Cifra is the largest retailer by far in Mexico.
Mexico remains an important market for
Wal-Mart because of its huge potential.
As the country continued to recover from
its 1995 economic crisis, Cifra opened 39
new units in fiscal 2000. In December, all
Supercenters were closed for a day as
prices on 6,000 different items were rolled
back. Cifra had $6 billion in sales in fiscal
2000, a figure that Wal-Mart plans to
increase this year.
Brazil also offers great oppor-
tunities, with the fifth largest
population in the world, and
with nine Supercenters and five SAM’S
Clubs already on the ground. The country’s
recent economic problems have presented a
challenge, but Brazil’s tendency to follow
U.S. cultural cues has been very encourag-
ing for Wal-Mart. This year, the Company
plans to expand its Brazilian presence by
opening three more SAM’S Clubs in the
country, with locations in Parana, Rio de
Janeiro and Sao Paulo. The three clubs will
create 600 new jobs — a tangible symbol of
Wal-Mart’s commitment to the country.
Puerto Rico is nicely positioned
to host a Wal-Mart growth
spurt. With 15 Stores and
Clubs already built on the island, Wal-Mart
seems prepared to benefit from a continued
economic upturn as the country bounces
back from the devastation of 1998’s
Hurricane Georges. And with the typical
annual income for a Puerto Rican family of
four running about $27,000, the island has
a strong need for everyday low prices.
Wal-Mart will continue to meet those needs.
Canadian Operations
Serve as Model
Over the years, naysayers
have scoffed at Wal-Mart’s
international aspirations,
claiming that the Company’s culture and
business practices would never translate
beyond U.S. borders. Skeptics even doubted
that Wal-Mart could succeed in Canada.
But, six years in Canada have proven the
critics wrong. Wal-Mart now has 166 dis-
count stores in Canada, and the Company’s
operations there are considered as a model
for Wal-Mart’s expansion into other interna-
tional markets.
When acquired, the 122-store Canadian
Woolco chain was losing millions of dollars
annually, but operations became profitable
within three years. Today, Canadian opera-
tions are among the most profitable in the
Company. The productivity of the stores
rivals that of U.S. Wal-Mart stores, and
the Company added 17 new stores in fiscal
2000. Wal-Mart has also added an interest-
ing flair in its Canadian operations, with
emphasis on quality fashion apparel such
as the BUM
®
line, a great product targeted
to young, fashion-conscious customers. In
the most recent development, Wal-Mart
opened 50 in-store One Source
®
Nutrition
Centers in fiscal 2000, providing pharmacy
customers with more than 1,500 natural
healthcare products.
So far, Wal-Mart has captured more than
35 percent of the Canadian discount-and
department-store retail market and has
become the largest retailer in Canada, the
United States and Mexico.
In Asia, meanwhile, Wal-Mart
has six Supercenters and
SAM’S Clubs in China and
five Supercenters in South Korea. The
unique and developing retail environments
of those countries throw
some challenges into the mix,
but the potential for Wal-Mart
in Asia is tremendous, considering that
South Korea has the highest population
density of any country on the planet, and
China has the most people: an amazing
1.2 billion residents.
⋆
In China, a homemade hat promotes
this Associate’s personal “VPI” product.
Selected Wal-Mart International
Retail Sales for Fiscal Year 2000
(
$
U.S. Billions)
$
5
$
10
$
15
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