Wal-Mart may shut supermarkets in Germany

19th June 2006, Comments 0 comments

19 June 2006, HAMBURG - Wal-Mart, which has flattened US rivals to become the world's biggest retailer but met defeat in Germany, may shut some of its German supermarkets because of losses, an executive has told a German newspaper.

19 June 2006

HAMBURG - Wal-Mart, which has flattened US rivals to become the world's biggest retailer but met defeat in Germany, may shut some of its German supermarkets because of losses, an executive has told a German newspaper.

David Wild, who heads Wal-Mart Germany, did not say in the interview with Welt am Sonntag how many of the 85 stores faced closure. "We are currently reviewing all unprofitable sites," he said.

"If we reach the conclusion with some that we cannot operate them sustainably in profit, we'll close them."

But he said Wal-Mart would not back out of Germany completely. The company shut two stores during the week.

Wild said some stores were doing very well and others "are losing a lot of money." The interview was released Saturday, a day before publication.

Wal-Mart has lifted profits to record levels in the United States but its eight years in Germany have been a disappointment.

Analysts have attributed this variously to the wafer-thin profit margins that prevail in German grocery retailing and to the fierce competition from big German retail chains that are themselves expanding round the world.

German shopping behaviour has also been blamed by the analysts, who say Germans of all income groups persist in shopping at discounters and no-frills outlets which offer quality groceries at lower prices than Wal-Mart does.

DPA

Subject: German news

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