Wal-Mart Stores Inc. (Bentonville, Ark.) will close two stores in Germany, citing limited growth potential. This marks the first closures since it entered the country in 1997.
The U.S. discount store giant will close a store in Ingolstadt, and will merge two stores in Welhelmshaven into one. At the same time, the company will open two new stores this summer in Gross Gerau and Berkamen, and a third in Berlin in 2003.
Wal-Mart has struggled to become a major player in Germany against established rivals. Last year, it abandoned plans to launch 50 new superstores there by 2003. Some market participants speculate that Wal- Mart will eventually be forced to leave the depressed German retail market.
According to Susanne Mueller, a spokeswoman for Wal-Mart Germany, the company doesn't plan to shut anymore stores. Wal-Mart operates 95 stores in Germany.
Kay Hafner, head of Wal-Mart Germany, says the company remains committed to its only foothold on the European continent. “The new openings underscore our long-term commitment to the German market and show that we want to grow in the future,” says Hafner.
At the same time, an analyst said the discount chain doesn't pose a threat to other German retailers, such as Metro AG, which operates discount wholesalers, and Aldi, a popular discount supermarket.
Before its entry into the German market, “Wal-mart was anticipated with great fear in Germany,” an analyst said. “That isn't an issue any more. The stores are full of problems.”