Great Wal of China

17 October 2006 By John Foley Follow @johnsfoley

Paying through the nose for 100 Chinese hypermarkets may ring alarm bells. After all, WalMart has made a fist of overseas expansion before. But the group needs growth, and China s $680bn retail market has bags of it. Besides, WalMart looks like it’s learning from past mistakes.

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WalMart has reportedly agreed a $1bn deal to acquire TrustMart, a chain of around 100 Chinese hypermarkets. The world's largest retailer already runs 66 stores in China. The mooted deal would make it China's biggest foreign retailer, with around $3bn of sales.

Earlier this year WalMart pulled out of Germany and South Korea after its approach of selling cheap goods through large stores failed to gain traction with consumers. The group recorded an $863m loss on its German operations, which it sold to rival Metro.

WalMart, which last year posted sales of $312bn, has been disappointed with recent growth in its home US market, which makes up 80% of sales. It has lately been pushing for new sites and formats in urban centres like New York and Chicago.

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