Walmart Plans To Shut Down 30 Stores In Brazil

In order to cut extra costs, Walmart is planning to close down 5% of its stores situated in Brazil.

Walmart is planning to shut down almost 5% of its store situated in Brazil, which are 30 stores. The retail chain has taken this decision in order to cut costs and expenditures, which are incurring consecutively by raising employee wages and other costs. The plans of shutting down stores in Brazil will be implemented in 2016 as the organization is also considering leaving the market that provides the least profit.

Walmart store Inc. has refused to comment regarding this news directly; however, it told Reuters that it is “constantly reviewing its portfolio and making decisions based on what is the best for the business and clients.” The chief executive of the organization, Doug McMillon, has plans to review the business international stores and remove underperforming segments from the company in order to succeed efficiently. It is already making some changes by selling some of its stores to other firms in Latin America, such as a restaurant chain situated in Mexico.

The market is not providing sufficient profit to the company. By shutting down 5% of Walmart stores in Brazil, which would be 30 stores, it will be able to run more effectively in the international market. It has 588 stores in Brazil according to a newspaper website of the country, Valor. This decision is mainly because a downfall has been witnessed in net sales by 0.4% in the third quarter. Sales of stores that have been operational more than a year now in Brazil have fallen by 0.6%.

Walmart Wholesale has a market capital of $193.56 billion currently, and has three divisions, Walmart USA, Sam’s Club, and Walmart international. The business has too many rivals and competitors in Brazil, such as Carrefour SA and many others, which are making it even harder for it to generate sufficient profit, even though this area is the Latin America’s biggest economy.

Walmart has to look into other sources to cut cost as it is investing huge sums of money in other areas of its business, such as it workers, who have been demanding a raise and protesting, which played bad role when it comes to the company image and integrity worldwide. It is also investing in other operations, such as its Pay App, while adding more features and issuers. Its management should not compromise on investment opportunities amidst cost-cutting measures and strategies.

Walmart stock closed at $61.06 after going green by 0.86% on December 24.