Wal-Mart Stores Inc.
) lofty target to lead India's retail segment by 2015 seems
bleak.. Per media reports, Wal-Mart recently announced that the
joint venture with Bharti Enterprises was 'not tenable' and it
will discuss its future plans in India in Oct 2013.
Wal-Mart set foot in India when the country opened its doors
to foreign direct investment (FDI) in the retail sector in an
effort to shore up the sagging Indian currency. Wal-Mart embarked
on a project called 'Jai Ho,' a Hindi phrase meaning 'let there
It planned to open 22 outlets in the growing Indian market
with a prosperous and burgeoning middle class.
However, things were not very rosy for the giant retailer.
India made it mandatory for the foreign retailers to buy at least
30% of their goods from small-scale and medium-sized local
enterprises that had a capex value of less than $2 million.
The international players, including Wal-Mart, however, felt
that this barred them from being on a level playing ground with
the local retailers and may hold them back from expanding into
traditional retail in India.
Moreover, Wal-Mart had to suspend its chief executive officer
of the India joint venture amid lobbying and bribing charges
against the company.
These hurdles proved to be unfavorable for the company in
carrying out business in India, and Wal-Mart was able to fulfill
its store opening target in 2012.
However, Wal-Mart revealed that it had no plans of leaving
India and instead plans to expand its wholesale business in the
Wal-Mart currently carries a Zacks Rank #4 (Sell). Other
retail-wholesale stocks worth considering are
Spartan Stores Inc
Whole Foods Market
). All these stocks carry a Zacks Rank #2 (Buy).
SPARTAN STORES (SPTN): Free Stock Analysis
SAFEWAY INC (SWY): Free Stock Analysis Report
WHOLE FOODS MKT (WFM): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
To read this article on Zacks.com click here.