India InfoLine – Walmart battles flagging sales in India, sales dip 32% in 2014

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Walmart India’s revenue abated to Rs 2,992.7 crore in 2014, making it decline by 32 per cent and the losses got shrinked further to Rs 232 crore considering no new stores were opened during the year, as per filings with the Registrar of Companies.

The wholesale company posted its first ever sales decline at a time when it is putting up with an internal probe into unscrupulous practices and suspending its storage expansion. The recent figures indicating losses come in post dissolving its joint venture with Bharti Retail in 2013.

“This sales figure comparisons are not for like-for-like operations due to transition during the period under review,” said Rajneesh Kumar, vice president & head, corporate affairs, at Wal-Mart India, as per media reports.

The Indian unit of Walmart Stores Inc, post parting ways with its key client, sold goods only to traders, institutions and local grocery stores that had an impact on the overall saales. About one-thrid of its merchandise was supplied to Bharti Retail-owned EasyDay stores, as per a company official, said the report.

The dipping sales could have also stemmed from other factors like the loss of Rs 142 crore on a turnover ofRs 3,439.9 crore for 2013-14, being borne by Metro Cash & Carry India. Besides this, aggressiveness of Rival Metro AG post its German parent informing about its expansion plans in India, could also have contributed to the losses of the wholesale company, as per experts, the report stated.

“Wal-Mart does bulk buying efficiently but it is located on the outskirts of cities, while Metro has an advantage of having wholesale centres closer to the end consumer. Also, local ecommerce players, even in wholesale, have been offering huge discounts, which has impacted large retailers,” said Ruchi Sally, director of retail consultancy firm Elargir, added the report.

 

 

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