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February 26, 2008

Wal-Mart threatened by Tesco’s invasion in the US market!

Wal-Mart has announced 4th quarter figures better and higher than expected. Sales per store increased by 1.7% and gross margin improved by 0.5%. A very small increase, but quite impressing given the current market turmoil. Wal-Mart Stores, Inc. operates discount stores and super centres that offer merchandise (such as apparel, electronics, hardware, small appliances, etc.) in the United States, Canada, Argentina, Brazil, Mexico, United Kingdom, and Puerto Rico.
wal-mart-image.jpgThe real interest though focuses in the news that Wal-Mart has started feeling threatened by the British invasion represent by retail giant Tesco.

Rumours have been partially confirmed when Wal-Mart announced plans to open up four stores, referred to as “Marketside”. The smaller-format stores will be tested out in Arizona, and will be about 20,000 square feet – about half the regular size of the Wal-Mart “Neighbourhood Market” model. These news come not long after Tesco opened a series of small stores dubbed “Fresh & Easy” in the US.

It will be interesting to see whether Wal-Mart’s “Marketside” experiment will be successful or not. If it does, the retail behemoth might gain substantially in reputation and therefore in value – a trend its investors definitely need to monitor closely!

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