Wal-Mart Tightens Gun Policy, Expands German Market

Wal-Mart Stores Inc., the world’s largest company and the largest gun seller in the United States, is strengthening its policy on firearms sales after the company’s research showed weapons were ending up in the hands of criminals.

In an internal memo obtained by The Associated Press, an executive at Wal-Mart ordered managers at its 2,600 American stores to institute what gun-safety advocates call a “don’t know, don’t sell” policy.

In Wal-Mart’s case, the policy would apply to sales of rifles and shotguns only, since the retail chain does not sell handguns.

Under current federal law, background checks through the National Instant Criminal Background Check System are required for anyone attempting to purchase a gun. If the results are not returned within three business days, the dealer may complete the sale.

“After much consideration, Wal-Mart has decided to amend our procedures … You must have a ‘proceed’ [no matter how long it takes] before any firearm is transferred to a customer,” officials wrote in the memo dated May 31.

Nine states — including California, Tennessee and Nevada — have standards that exceed federal guidelines for purchasing firearms. Arkansas is not among them.

“When we looked into this, we found that the statistics show that a high proportion of the applications not approved within three business days would have been denied,” said Wal-Mart spokeswoman Jessica Moser Eldred. “We wanted to make sure we were doing our part to keep guns out of the hands of those who should not be getting them.”

Eldred confirmed that the memo had been sent out last month to every Wal-Mart store in the country and that the new policy is now in effect.

“Selling one gun to somebody who should not be buying it was one too many for us,” she said.

Most background checks are completed within minutes, and 95 percent are done in two hours or less.

Gun-safety advocates say the remaining 5 percent should not be given guns until a background check has been completed.

Recent research showed that, during an 18-month period, more than 10,000 criminals in the United States obtained guns through licensed dealers because their background checks could not be completed within three days, according to the Americans for Gun Safety Foundation.

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Wal-Mart plans to close two of its 96 stores in Germany. These are the first voluntary store closures for the world’s largest retailer in Germany, which is Europe’s largest economy, accounting for 15 percent of the continent’s $2 trillion annual retail market.

When Wal-Mart announced the closures on July 10, the company also said it opened a new store in Bergkamen, Germany, on June 11 and plans to open its second Supercenter in Berlin by this time next year. In August, another store will be moved from one location to another in the city of Gross-Gerau.

Wal-Mart entered Germany in December 1997 with its purchase of the 21-store Wertkauf hypermarket chain and later purchased the 74-store Interspar chain. The first Wal-Mart store to be built in Germany from the ground was completed last year in Pattensen at a cost of $17.4 million. A Wal-Mart store in Cologne was destroyed by suspicious fire and not rebuilt.

Although Wal-Mart has struggled to get a foothold in Germany, John Lawrence, an analyst with Morgan Keegan & Co. in Memphis, said the closing of the two stores is insignificant.

“I think two acquired stores that are closed are not a major issue,” he said. “There’s no question they had to reformat [the stores in Germany] and do some things differently … They knew there were going to be a lot of changes they had to make over there. In the end, I think they have a pretty good idea about how to serve the market. Probably to relocate those stores to another area makes sense. The process to get it where they wanted it to be has been a slower process [than expected], but over time they’ll fix it.”

Wal-Mart will close a store in Ingolstadt and merge two stores in Wilhelmshaven into one, spokeswoman Susanne Mueller said.

News wires reported that Wal-Mart scuttled plans to build 50 new Superstores in Germany by 2003, but that’s not accurate. The comment about 50 new stores was made casually by Allen Leighton, the former head of Wal-Mart’s European operations, in response to a reporter’s question two years ago. Jose Gomez, a former spokesman for Wal-Mart International, said that Leighton was talking about what he would like to see in the future, and 50 new stores in Germany was never part of Wal-Mart’s plan in Germany.

Wal-Mart doesn’t release earnings figures for its German operations, but analysts say the company has been losing money from day one. The amount of losses, however, may not put a dent in the world’s largest company, which had revenue last year of $218 billion.

Michael Pohn, an analyst with DZ Bank in Frankfurt, Germany, said the presence of Wal-Mart in Germany has made German companies operate their stores more efficiently.

“Everybody was really scared of Wal-Mart, especially the similar chains,” he said. “German store chains have gotten better to compete with Wal-Mart.”

To prosper in Germany, though, Wal-Mart will have to acquire another retail chain to add to its leverage in the market, Pohn said.

In its 40-year history, Wal-Mart has closed only a “handful” of U.S. stores because they weren’t performing, said Tom Williams, a spokesman for the company. “Fewer than half a dozen,” he added.

Maria Fairchild, a spokeswoman for Wal-Mart’s international division, said the company has closed only three stores outside the United States because of poor performance. All three were Sam’s Club stores in Argentina, which were closed in 2000.