- Wal-Mart’s Asda Group in the UK reportedly will announce later today the elimination of as many as 1300 jobs, 300 of them at company headquarters, as it looks to improve its earnings potential in the face of a declining market share.
Asda generates about half of all Wal-Mart’s international sales, but has suffered lately as both Tesco and Sainsbury have been improving their market shares.
- Published reports in Japan suggest that Wal-Mart will increase its stake in Seiyu, that nation’s fourth largest retailer, from its current 42.4 percent to more than 50 percent, making Seiyu a subsidiary of the US company.
While both Wal-Mart and Seiyu are saying that no decision has been made, expectations are that the increased ownership by Wal-Mart will take place before the end of the year.
However, local analysts say that the move won’t guarantee Seiyu’s long-term success, noting that while Wal-Mart has improved supply chain efficiencies at the company, consumers haven’t embraced the American retail giant with unabashed enthusiasm.
- The East Bay Business Journal reports that California legislators have decided not to “water down” three-year-old legislation that prevented Wal-Mart from buying an Orange county industrial bank that, while it would have been able to offer checking accounts, would have allowed the company to offer many other services offered by banks.
As written, the current legislation restricts the ownership of industrial banks, but a new bill would have rolled back the restrictions. The Journal says that the decision by legislators to put any change in the law on hold for the year came after influential community bankers expressed concerns about the impact Wal-Mart’s entry into financial services might have on their institutions.
- KC's View:
We don’t blame the bankers for being concerned. Wal-Mart would have instantly forced them to be more competitive, more customer-focused, and offer lower rates on loans and give higher rates of interest.
Bad for business. At least, their business.
We have to admit to mixed emotions in this case. While we think that Wal-Mart getting into the financial services business probably would be good for consumers and bad for the thieves and villains who mostly run America’s financial institutions, we continue to have concerns about what happens when one company infiltrates so many segments of American life.