New York, Oct 28 - Wal-Mart Stores Incwill focus on expanding its international business by putting more capital toward emerging markets and store remodeling projects, the world's largest retailer said on Tuesday.
The announcement comes a day after Wal-Mart said it would slow the opening of new stores in the United States and focus on remodeling existing locations to improve sales.
In the past five years, Wal-Mart said it has allocated roughly 67 percent of its capital in its international division toward mature markets, like Canada and Japan.
But over the next five years, it will allocate roughly 47 percent toward mature markets and 53 percent for emerging markets, like Mexico, China and Brazil.
The retailer expects spending for new stores to remain roughly flat this year and next year, but it will put more money toward remodeling efforts.
"We are building smaller stores and we're building stores that require less capital to enter a market," said Mike Duke, Wal-Mart's vice chairman of international. He was speaking at Wal-Mart's analyst meeting that was broadcast online.
Wal-Mart expects total international capital expenditures for its current fiscal year, which ends in early 2009, of $4.5 billion to $4.8 billion, and spending of $4.8 billion to $5.3 billion next year. Last year, its international capital spending was $4.6 billion.
With Wal-Mart reaching the saturation point in many U.S. markets, it has highlighted its international businesses as a growth engine.
The division accounted for 24 percent of Wal-Mart's $374.53 billion in net sales in the last fiscal year. While sales at its namesake discount stores rose 5.8 percent last year, they jumped 17.5 percent in its international division.
Wal-Mart said its international markets are not immune from the tough economic times.
"These are difficult times, not just in the United States but around the world," Duke said.
But Wal-Mart, with its low prices, is well positioned to weather the current climate, Duke said.
The retailer said that in Japan it expects to operate three distinct store formats -- supermarkets, food and drug stores, and supercenters. Wal-Mart is also becoming "very aggressive" in remodeling stores in that country to improve sales, and Wal-Mart Japan is open to exploring potential mergers or acquisitions.
Wal-Mart also expects to open its first cash-and-carry center in India in the first half of 2009. Wal-Mart has a venture with India's Bharti Enterprises for cash-and-carry wholesale operations.