Walmart attempts international turnaround with UK, India tie-ups

A customer pushes a shopping cart at a Walmart store in Chicago, in this file photo. REUTERS

Walmart's urgency to stem market share losses to rivals around the world is driving it to partner with local players in the UK and India, even as it scales back in some other markets like Brazil.

The world's largest retailer is in talks to merge its UK arm ASDA with J Sainsbury, in which it will hold a minority stake. Walmart is also looking to acquire a majority stake in leading online retailer Flipkart for $10 billion to $12 billion after years of underperformance here.

The moves underscore Walmart's renewed focus on catching up with competitors, ranging from grocer Aldi to Amazon.com, in key international markets. The retailer's underperforming international business contributed less than a quarter to its total revenue of $500.3 billion in fiscal 2018. It also marks a shift in Walmart's traditional approach of building a business on its own.

A Walmart spokesman declined to comment on the negotiations in the UK and India.

Overall, sales from Walmart International, which runs about 6,300 stores globally, stood at $118.07 billion in the fiscal year ended 2018, down nearly 14% from $136.5 billion in 2014.

This was in large part due to adverse currency movements, which hurt the money repatriated from its foreign arms, but also because of a series of missteps in major markets around the world.

In an effort to fix its international performance, Walmart in January appointed Chief Operating Officer Judith McKenna to run its international unit, and has indicated it will focus on its core North American markets and growth markets like China and India.

Walmart's international woes have been exacerbated by slow decision-making over the years, and even initial talks with Flipkart began as far back as 2016.

Walmart initially entered the Indian market in 2007 through a joint venture with Bharti Enterprises, years before Amazon debuted there. That JV was called off in 2013, and its presence in India has remained largely static since then, at least in part due to restrictions around foreign investment in physical retail in India.

Walmart's slow-footedness means if a deal is announced, Flipkart could be Walmart's largest acquisition to date, potentially at a steep premium to what SoftBank Group paid for a stake in the company less than a year ago.

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Walmart attempts international turnaround with UK, India tie-ups

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