Walmart’s chief executive in Japan has resigned suddenly, just over a year after he assumed the post, creating uncertainty about the US retail group’s strategy in the country.
Toru Noda became chief executive of Walmart Japan and Seiyu, its Japanese supermarket chain, in February last year. He is stepping down for personal reasons, Walmart said.
Mr Noda’s departure adds to upheaval in Walmart’s east Asian operations. It follows the resignations of three senior executives at its China business in the past month, including one last week.
However, Walmart was seen to be stabilising its operations in Japan, where it has struggled to deliver returns on investment to satisfy its shareholders.
Mr Noda will be replaced by Steve Dacus, formerly the chief operating officer of both Walmart Japan and Seiyu.
Separately on Monday, Walmart said it had completed its $2.4bn investment for a 51 per cent stake in Massmart, a South African retailer that it wants to use as a springboard to expand across Africa.
Walmart is looking to foreign markets to offset the flat performance of its US business, but in several countries it has found the going tough. It first took a stake in Seiyu in 2002 and the chain has become the US retailer’s biggest investment in Asia, but did not begin to post consistent profits until 2009.
Mr Noda said this year that the group had completed the restructuring of Seiyu’s unprofitable stores and was looking to expand in Japan.
But plans to increase its presence in the market, where it has built up its operations from a small stake before acquiring control over Seiyu, have been affected by the devastating March 11 earthquake and tsunami, which damaged stores and depressed consumer demand.
While even the strongest domestic supermarket groups have suffered as a result of Japan’s ageing population and deflationary pressures, Takayuki Suzuki, an independent retail analyst, said that, after nearly a decade in the country, “it wouldn’t be surprising if there had been pressure [on Mr Noda] for faster growth” from Walmart headquarters.
Walmart has emerged from its worst period in Japan and was probably looking to expand aggressively, he added. But he said it was not possible to expand as quickly as Walmart was likely to want.
That is because, in Japan’s highly fragmented market, there are no mergers and acquisition targets available that would be large enough to make a difference to Walmart. The only supermarkets still available are a 10th of the size of Seiyu, Mr Suzuki points out.
Source : Financial Times
