Walmart has struggled to grow share in Japan since entering that market in 2002. Walmart increased its stake in Seiyu in 2008 becoming the sole owner of the retail business. There has been speculation Walmart was considering a sale of Seiyu to focus more on growth in India and China.
This week Lionel Desclée, CEO of Walmart Japan, told employees Walmart would remain invested in Seiyu but may sell a minority stake in the company, according to a June 26 press release from Walmart Japan/ Seiyu. Desclée said in the release the company has a longer term aspiration to list a minority stake of the business in Japan.
“We believe a Japan listing would empower Seiyu to accelerate the journey of building a strong, innovative local value retailer both in-stores and online, while still enjoying the benefits of being powered by Walmart,” Desclée said.
In the short-term, he said, Seiyu will continue looking for business opportunities that fit the needs of its customers, suppliers and employees. The work will include a deeper focus on fresh and deli businesses as well as accelerate it’s omnichannel presence with the Rakuten joint-venture. Desclée said this partnership is bearing fruit and driving higher sales to record levels in June.
Seiyu plans to put a greater emphasis on pricing, assortment and better capturing local needs that will be key to the retailer’s success. A new program of store remodeling will also enhance Seiyu’s appeal for customers, he said.
“Through a focus on innovation and meeting customer needs every day, our ultimate ambition is to be Japan’s leading, local, innovative value retailer, focused on the everyday needs of our customers and powered by Walmart. The Spark Plan is a roadmap for growth supported by significant investment in our operations in Japan,” Desclée said.
Walmart International CEO Judith McKenna told the media earlier this month the Japanese market has had its challenges but the retailer is reasonably happy with the performance. She also said partnerships are likely the way Walmart will be invested internationally in the future. McKenna said partnerships in the Flipkart deal have worked well. The partner relationships with JD.com and Dada-JD Daojia in China have also been advantageous for helping Walmart’s growth in country.
“I am very excited about this new roadmap for growth at Seiyu which has the strong support of Walmart’s global leadership team. A potential public listing of Walmart Japan with Walmart retaining majority ownership would be aligned with our strategy of creating Strong Local Businesses, Powered by Walmart,” McKenna said while speaking in Japan this week.
Walmart Seiyu operates 331 stores in Japan, 172 of those are supermarkets, 88 are hypermarkets and roughly 70 speciality stores. Walmart employs more than 34,429 people in Japan.