retail news in context, analysis with attitude

• The Wall Street Journal reports that even though its Brazilian unit has been "facing lackluster sales," Walmart "is making a contrarian bet" there, "investing heavily to revamp its U.S.-style big-box stores even as shoppers increasingly flock to smaller, cheaper options." The plan is to spend the equivalent of $320 million (US) over three years.

This means "mostly sticking with a strategy it has followed here for two decades. Wal-Mart’s net sales in the country have been sluggish in recent years compared with its other international markets, falling 4.1% for the three months ended Jan. 31, versus increases for the same period of 8.9% across Mexico and Central America, and 5.4% in China."

The story suggests that while Walmart's big box stores were popular in Brazil three decades ago, it is facing issues today that make them seem - at least to some - to be so last century. For one thing, "hellish traffic in mushrooming cities makes hypermarkets hard to reach. Small neighborhood convenience stores are attracting Brazilians who increasingly live alone, not in large family homes."

And at the big box end of the market, "Warehouse-style stores known as 'cash and carries' - many owned by France-based Carrefour and Groupe Casino ’s GPA and originally targeted at small businesses - sell household items and a small selection of groceries in bulk to families at steep discounts ... Shoppers tend to go once a month or so to stock up on items like cleaning products and beer and rely on neighborhood supermarkets for most food and grocery items."
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