Wal-Mart Abandons Efforts To Enter Russian Market
STEVE INSKEEP, host:
Russia's retail market seems to have been an exercise in frustration for Wal-Mart. Yesterday, the retailer said it is closing its Moscow office after years of trying to set up an operation. Apparently, they tried to start that three times, and it never did turn over.
From Moscow, Peter Van Dyk reports.
PETER VAN DYK: Russia's underdeveloped retail sector lures international giants with promises of high returns. But Wal-Mart has struggled to find a way in. There were limited opportunities for the world's largest retailer to build its own stores, and it had been looking at acquiring a local chain. Despite being linked with several potential partners over the past year, it has always balked at the price. Now, Wal-Mart says, there are no near-term prospects.
Natalya Zagvozdina is an analyst with Renaissance Capital Investment Bank. She says the global financial crisis meant some good deals were on offer, but Wal-Mart failed to take advantage.
Ms. NATALYA ZAGVOZDINA (Analyst, Renaissance Capital Investment Bank): I really am puzzled with this move to be present on the ground for many years, and during the crisis, looking at a number of acquisitions and not making one. In my opinion, they've lost a few years of good growth, but I'm positive they will return.
VAN DYK: That is because the Russian retail sector is very profitable compared with developed markets. But it is a tough nut to crack. A handful of European chains are doing well in a sector dominated by domestic companies, and Wal-Mart seems unlikely to close its doors to Russia's 140 million consumers forever. It will apparently wait until the price is right.
For NPR News, I'm Peter Van Dyk, in Moscow.
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