Walmart admits defeat in UK but eyes bigger prize
The sale of Asda is just the latest stage in a radical shake-up of the American retail giant in its bid to take on Amazon, reports David Millward
Changes have been coming thick and fast at Walmart, the American retail giant that started life when Sam Walton opened a five and dime store in Bentonville, Arkansas, in 1950.
The past few months have seen the company snap up high-end online businesses as it aims to take on upstart rival Amazon in the US. Now Walmart is overhauling its overseas operations as it tries to pick winners in the international market. Part of this strategy has seen Walmart sell off Asda, a company it has owned for 20 years.
The company’s first international foray dates back to 1991 when it opened a store in Mexico City and, at the last count, the corporate behemoth had a presence in 27 countries.
However, the appointment of Judith Mckenna to oversee its international operations has paved the way for a radical change of direction and it is this that has underpinned the sale of Asda to Sainsbury’s. The deal, which will give Walmart £3bn in cash and a 41pc stake in the combined business, surprised some in the US.
“When I first saw the headlines over the weekend I thought Walmart was buying Sainsbury’s,” says Neil Stern, of retail consultants Mcmillandoolittle.
“Then I reread the headlines and realised Walmart was selling Asda, which was the biggest acquisition it ever made.
“I think, looking at it from the point of the global chessboard, the UK market was very competitive. It was
‘It was impossible to grow Asda. It had settled to being a very unhappy number three in that marketplace’
impossible to grow Asda. It had settled to being a very unhappy number three in that marketplace.”
Quite simply, Walmart believes that the money it will receive for Asda can
Walmart is looking to increase its footprint in India, where it is battling Amazon, led by founder Jeff Bezos, left, for a majority stake in the country’s leading web retailer Flipkart