29 September 2009
Retail.ru: Bryan, what do think about the main directions for Walmart's world expansion now?
Bryan Roberts: Walmart's key strategic markets for international expansion consist of Latin America and Central & Eastern Europe, including Russia. Its acquisition of D&S in Chile broadens its presence in Latin America and could possible see it enter Peru and Colombia. This will occur alongside its existing high-growth opportunities in Mexico, Argentina and Brazil. In CEE, progress has obviously been slow since the creation of a management team and the opening of an office in Russia. While we believe that its low-price strategy would be extremely successful in Russia and other CEE markets, there appears to be a degree of uncertainty around how Walmart will actually execute its entry into the market. Obviously – a merger or acquisition would be the preferable choice for Walmart, the remaining question would be which retailer would be the best target.
Retail.ru: What do you think about Walmart strategy in Russia? Can Walmart use his Small box format in Russia?
Bryan Roberts: Walmart has moved away from its traditional big box strategy and is now demonstrating increasingly flexible skills in operating small box concepts – both in terms of smaller stores that it has inherited through acquisitions (such as in Brazil) and smaller concepts that it has opened from scratch, like Super Ahorros in Puerto Rico and Smart Choice in China. This strategy enables the retailer to open stores in a greater number of locations and target underserved consumers. It also means that Walmart can be more flexible in terms of potential acquisition targets In Russia as well as in other markets.
Retail.ru: Bryan, as you said early in you Webminar on PlanetRetail.net Walmart always careful about expansion on new market, but company would be double careful about expansion on Russian market. Can you clarify your meaning about Walmart and Russia?
Bryan Roberts: I think that it is no secret that some existing international retailers in Russia – like IKEA – have encountered problems with corruption and we know that a number of other potential market entrants have been discouraged from acquiring Russian retailers due to these problems and other financial or corporate governance issues. Walmart famously has a totally zero tolerance towards corruption and is extremely careful in terms of due diligence for acquisitions. I think this approach has been the reason that its Russian market entry has taken much longer than expected.
Retail.ru: Shell Walmart start it's Russian expansion from towns or from Moscow and Moscow region?
Bryan Roberts: In all honesty – this will depend entirely on which company it acquires or with which company it enters a partnership with. I don«t think that geography is Walmart»s prime concern.
Retail.ru: Is it true that Walmart's main criterion for emerging markets are political risks? What is your assessment for the present political risks for Walmart in Russia?
Bryan Roberts: Political risks are clearly part of Walmart's decision making process, particularly since it had some bad experiences in Indonesia many years ago, but I think its main criteria will be based on economic and competitive factors.
Bryan Roberts has spent over ten years researching and analysing the shifting retail environment, covering a wide array of retail sectors and trends around the world. In recent years, he has headed up the analyst team at Planet Retail, specialising in the food, drug and mass retail channels. In addition, he is in constant demand as a speaker at an extensive number of supplier, retailer and trade body events, providing an objective viewpoint on a broad variety of topics such as food retailing, private label, sustainability and discount stores. He is also a regular commentator on retail issues for both domestic and international print and broadcast media. Bryan holds a masters degree in International Political Economy from the University of Warwick. Bryan Roberts has spent over ten years researching and analysing the shifting retail environment, covering a wide array of retail sectors and trends around the world. In recent years, he has headed up the analyst team at Planet Retail, specialising in the food, drug and mass retail channels. In addition, he is in constant demand as a speaker at an extensive number of supplier, retailer and trade body events, providing an objective viewpoint on a broad variety of topics such as food retailing, private label, sustainability and discount stores. He is also a regular commentator on retail issues for both domestic and international print and broadcast media. Bryan holds a masters degree in International Political Economy from the University of Warwick. Bryan Roberts has spent over ten years researching and analysing the shifting retail environment, covering a wide array of retail sectors and trends around the world. In recent years, he has headed up the analyst team at Planet Retail, specialising in the food, drug and mass retail channels. In addition, he is in constant demand as a speaker at an extensive number of supplier, retailer and trade body events, providing an objective viewpoint on a broad variety of topics such as food retailing, private label, sustainability and discount stores. He is also a regular commentator on retail issues for both domestic and international print and broadcast media. Bryan holds a masters degree in International Political Economy from the University of Warwick.
By Elena Kadochnikova