BENTONVILLE, Ark. -- The biggest company in the world is taking an even bigger bite out of the global food-retailing business. Wal-Mart Stores here continued to take steps in the past year to strengthen its position as the world's largest food retailer, as ranked according to total company sales by www.planetretail.net, London (see Page 16), while several of its rivals also made moves to shore up their positions in the global ranking.
During its most recent fiscal year, the Wal-Mart International division reported sales growth of 10.5% to $35.5 billion, while operating income increased 31% over the prior year. The division now has 1,186 stores, including 107 new stores opened in fiscal 2002 in multiple retail formats in nine countries.
At the company's annual meeting earlier this month, John Menzer, chief executive officer, Wal-Mart International, said overseas expansion will continue through acquisition and new-store development.
"We are very early in the growth and development plan in Wal-Mart International," Menzer said.
Among the retailer's overseas expansion projects was the opening of its first Neighborhood Market grocery store outside the United States in China. The company has 33 of the small-footprint, food-and-drug combo stores in the United States.
In March Wal-Mart gained a foothold in the second-largest retail market in the world, via the acquisition of a 6.1% stake in Seiyu, Tokyo. It also has options to purchase up to 66.7% of that company, which operates over 400 stores located throughout Japan. Wal-Mart previously had been interested in Japanese retailer Mycal, which was acquired last year by Aeon, Chiba, Japan, the No. 17 food retailer on SN's list.
The No. 2 global grocery retailer, Carrefour, Paris, expanded last year in Romania, Tunisia and Switzerland and completed the acquisition of Norte in Argentina. This year, the company also entered Egypt and is seeking a 35% stake in Carulla Vivero, Bogota, Colombia. Carrefour also acquired a 40% stake in Distributis AG, the joint venture established with Maus Freres in Switzerland, and established a 50-50 joint venture with its French franchisor Hyparlo Romania.
Meanwhile No. 3 Ahold, Zaandam, Netherlands, extended its U.S. operations with the acquisition of the Bruno's supermarket chain and the Alliant Foodservice distribution company. It also extended its Central American joint venture to include Costa Rica. In Western Europe, Ahold entered a joint venture in Scandinavia with Danish retailer Dansk Supermarked.
In its recent year-end financial report, Ahold said its operating earnings in Europe fell 10.8% last year, however, on higher costs for the integration of Ahold Spain and Superdiplo and lower operating earnings in Portugal.
Dusseldorf, Germany-based Metro AG, No. 5 on the list of the Top 25 grocery retailers, has been aggressive in Eastern Europe, where it is now the leading grocery retailer in the Czech Republic, Hungary and Poland and second in Slovakia, according to www.planetretail.net.
Tesco, Cheshunt, United Kingdom, also has invested heavily in Eastern Europe, where it is the second-largest operator of hypermarkets in the region, with 50, behind Ahold's 52. Tesco also has invested in its Tesco Lotus operations in Thailand, where it competes with Casino's Big C, and in its South Korean joint venture with Samsung.
According to www.planetretail.net, Saint-Etienne, France-based Casino's pending acquisition of a 37.6% stake in Laurus would make the company the No. 2 food retailer in the Netherlands, behind Ahold, which has a 44.3% share of grocery there.