Walmart said it intends to close roughly 30 underperforming stores in Japan, backtracking on its initial expansion in the region two years ago in favor of focusing on its fresh food offerings and accelerating improvements at existing stores.
The locations set to be shuttered operate under the Seiyu banner, a national grocery chain, which Walmart bought a 6.1% stake in back in 2002, and took full control of in 2008. The retailer now has 434 locations in Japan, 363 of which are branded Seiyu stores, according to its website.
Walmart said it plans to remodel roughly 50 Seiyu stores next year, emphasizing its fresh food and deli offerings and creating a lively shopping environment for consumers to find quality fresh foods or do quick shopping for prepared meals.
And in Tokyo, where demand for online grocery delivery is growing, the retailer said it would work to increase its fulfillment and service capacity over the next few years to serve the consumer more efficiently and cost-effectively.
The store closings are reportedly part of the retailer’s plans to accelerate growth in Japan where consumers have been slower to catch on to the discount chain’s prices and offerings.
According to a company statement, Seiyu has sustained sales and profit growth over the last five years, and growth continued to accelerate in the first half of this fiscal year, outperforming the overall market. Walmart attributed the positive performance to price leadership, efforts to enhance fresh offerings and growth of its private brands and services under Seiyu.com. Revenue for Walmart’s international business was up 1.3% to $137 billion last year, accounting for 29 percent of total sales.
The company said it estimates charges tied to the store closures will amount to $0.04 or $0.05 a share, which will be recorded over several quarters.