Revelations that Wal-Mart considered pulling out of Asda last year have created shockwaves in the retail industry.
According to a report in The Sunday Telegraph, Wal-Mart president Lee Scott ordered a strategic review of the UK chain last year, which could have seen Wal-Mart “float a minority stake in Asda, or even pull out entirely”.
The review has apparently now been shelved. But executives say Scott has become reluctant to invest large amounts of capital in the competitive UK market, when better business could be generated in the emerging markets of China, India and South America.
The flotation of a stake in Asda on the London Stock Exchange would have provided the UK business with capital to invest in opening new stores and developing new formats.
Wal-Mart is also rumoured to have considered an outright sale of the UK’s number-three chain, which The Telegraph says has failed to overtake Sainsbury’s, even nine years after the Wal-Mart sale.
The decision by the Competition Commission to prevent Asda from buying Safeway in 2004 is believed to have particularly infuriated Wal-Mart.
A withdrawal from the UK market would not be the first time Wal-Mart has pulled out of unprofitable markets. The firm withdrew from retail markets in Germany and South Korea in 2006.
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