Wal-Mart to invest 1.2B reais in Brazil in 2011, open 80 new stores in the country, most of which will be geared toward C, D and E classes; retailer says investment will create 7,000 direct jobs
May 3, 2011
– NOTE: This document was translated from the original release which was posted on www.walmartbrasil.com.br earlier today.
Investments will be focused on the opening of new stores, as well as the renovation of current units, improvements in logistic and technology
The president and CEO of Walmart International, Doug McMillon, announced today, during his visit to Brazil, the company's investment plans for 2011. There will be 80 new stores which will open with an investment of R$ 1.2 billion over the year. "Brazil is an extremely strategic market for Walmart. With the economic stability of the recent years, we see an excellent growth potential here and we will continue to invest in expansion," said McMillon. Over the past five years, Walmart has already invested R$ 6 billion in the country, with the construction of 177 stores and about 25,000 jobs created.
The resources will be primarily used for the opening of the 80 new stores, of all formats that the retailer operates in the country: hypermarkets, supermarkets, wholesale, membership clubs and neighborhood stores. Most of them - more than half of the units - will be geared toward the C, D and E classes, with the Todo Dia (retail) and Maxxi (wholesale) brands. "Our expansion plan will continue to support the socioeconomic development of the Brazilian population," said Marcos Samaha, president of Walmart Brazil. "The focus in formats aimed at the emerging middle class will be even stronger in 2011," he added.
Jobs – Besides opening new units, Samaha points out that part of the resources will be addressed to the renovation of older units, improvements of the logistic system and technology. Altogether, the investments will allow the creation of more 7,000 direct jobs and 20,000 indirect jobs in 2011. "We are not only investing in new stores, but also expanding the program to support regional suppliers, social responsibility programs and projects for conservation of the environment," added Samaha. In 2010, the company opened 45 new stores and created 6,000 jobs.
Every Day Low Price - This year was also marked by the initiation of "Every Day Low Price" (EDLP), Walmart’s new pricing policy put in place in January. EDLP has evolved since the renegotiation of agreements with suppliers to improve the assortment of stores, services and how products are displayed on shelves. "This is not about a pricing strategy, but an unprecedented business philosophy in Brazil. We started by lowering the price of 2,000 items and now have over 7,000 products in stores with prices renegotiated, always lower in price than the average in the market.
As of February 28, 2011, Walmart Brazil operates today 480 units and 87,000 employees in 18 Brazilian states (+ Federal District). A total of nine formats including hypermarket (Walmart, Hiper Bompreco and BIG), supermarkets (Bompreco, Nacional and Mercadorama), wholesale (Maxxi), membership club (Sam's) and neighborhood stores (Todo Dia). The company's revenue in Brazil in 2010 was R$ 22.3 billion, representing 13% growth over the previous year.
Sustainability - In 2010, Walmart announced its global goal on sustainable agriculture: giving small farmers access to their stores, by purchasing $1 billion in goods of nearly one million small and medium producers by 2015, and ensure training for these farmers. In Brazil, in the next four years, Walmart will double the purchase of items from the Producers' Club, increasing the income of small producers, between 10% and 15%, besides increasing the number of families who benefit from the program from 7,000 to 14,000.
Regarding plastic bags, due to Walmart Brazil’s unique "Conscious customer deserves credit” program - which gives discounts for not using plastic bags – there are 45 million less plastic bags in the environment and a saving of R$ 1.3 million for consumers. Through this program, every bag not used (or five items purchased), the consumer earns R$ 0.03, equivalent to the cost of the bag. Besides the discount, the stores have preferred check-outs for people who use alternative ways to carry their purchases.