WAL-MART LACKS FIRM STRATEGY FOR INTERNATIONAL EXPANSION

ATLANTA -- Wal-Mart Stores' next global-expansion moves are the stuff of much speculation, but maybe such speculation isn't that productive: Lee Scott, Wal-Mart's president and chief executive officer, said last week that the discounter is pressing into international markets without a firm blueprint or time line."We're more opportunistic than strategic," Scott told an audience of international retailers

ATLANTA -- Wal-Mart Stores' next global-expansion moves are the stuff of much speculation, but maybe such speculation isn't that productive: Lee Scott, Wal-Mart's president and chief executive officer, said last week that the discounter is pressing into international markets without a firm blueprint or time line.

"We're more opportunistic than strategic," Scott told an audience of international retailers and suppliers here at the CIES Summit sponsored by CIES-The Food Business Forum. "We'd like to be in a number of countries, but we're not on a time line. We don't want to overpay. It'll be obvious when it's the right time."

Supercenters operated by the Bentonville, Ark.-based company recently have been the main focus of observers following the company in the United States, but the retailer operates close to 4,500 stores worldwide, in regions including North America, Latin America, Europe and Asia. Non-U.S. business represented less than 20% of the retailer's sales of about $218 billion last year. But at $40 billion, that non-U.S. business is huge. Wal-Mart has had mixed experiences in recent years with international forays, but it is committed to growing globally by fine-tuning its ability to adapt to local markets, Scott stressed.

"There are differences between markets, and we've never been confused about that fact," he said. "We'd never take a U.S. store and put it in Argentina and expect customers to flock there. But although we understand there are differences, we're not always as good at understanding what those differences are."

Scott said that while Wal-Mart will remain flexible to the needs of local markets, it will not bend on some core attributes of its culture, including everyday-low-price and a customer-centric approach.

"The No. 1 question I get is, 'When will we have to change to succeed in other countries?"' he said. "Well, I don't think so, because the customer is always the boss. I can't think of a country where customers want to be abused. They want value, and we are a low-price retailer. We don't buy high-margin retailers. We can't manage that."

Scott pointed to the acquisition of Asda Group in the United Kingdom as a positive experience because of a "great management team" that has since brought some best practices to other parts of the company. Wal-Mart has been successful in fixing problems in its Canadian operations and is "doing better" in Brazil and Argentina, he said. Scott also said the company is having successes in Mexico. But he did not point to Wal-Mart's German operations, which have reportedly been experiencing difficulties in adapting its model to the German market.

Wal-Mart's biggest global opportunities include building on best practices, private brands, shared logistics knowledge and global supplier partnerships, Scott said.

"With global supplier partnerships, we need to continue to find out how to take costs out," he said. "We want to have consumers enjoy the benefits. As you move prices down, you drive consumption up. That's good for us: suppliers and consumers."