Walmart CEO: No truth to sale of Seiyu and exiting Japan

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Walmart CEO: No truth to sale of Seiyu and exiting Japan

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Walmart CEO: No truth to sale of Seiyu and exiting Japan

THE ASAHI SHIMBUN

November 7, 2018 at 16:20 JST

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Photo/IllutrationWalmart Japan Holdings KK’s interim CEO Mitchell Slape speaks during an exclusive interview with The Asahi Shimbun in Tokyo’s Kita Ward on Nov. 6. (Ryuhei Tsutsui)

Despite a flurry of media reports, U.S. retailer Walmart Inc. has no intention of selling its Seiyu supermarket unit, a top company official said in an exclusive interview with The Asahi Shimbun on Nov. 6.

Mitchell Slape, 51, interim chief executive officer of Seiyu GK, who also serves as interim CEO of Walmart Japan Holdings KK, vehemently denied the possibility of exiting from the Japanese market.

He said that Walmart, the world's largest retailer, has had no discussions with any third parties concerning a possible sale of Japanese supermarket chain Seiyu.

Slape showed his willingness to bolster the retailer's online supermarket business launched in August through a collaboration with Japan's leading online retailer, Rakuten Inc.

Reports of Walmart seeking to sell Seiyu surfaced this summer in various media.

The Asahi Shimbun also speculated over the company’s possible withdrawal from Japan in a story in July that said: “(Walmart) appears to be leaning toward exiting from Japan’s market where its business growth is unlikely to be realized due to depopulation and other factors.”

Slape dismissed the recent media reports that said Walmart had sounded out the possibility of the sale of Seiyu with investment funds, distribution powerhouses and other entities.

He said Walmart has not and will not have discussions (over the sale of Seiyu) with any third parties so far and in the future.

Seiyu in August started operations of its online supermarket “Rakuten Seiyu net super” in tandem with Rakuten.

In October, the supermarket chain enhanced its distribution system by launching operations of a delivery center in Kashiwa, Chiba Prefecture.

Recently, Seiyu has also focused on new investment as the company opened an outlet in Saitama that allows customers to pay through a smartphone app.

Refuting the rumors of a possible sale, Slape told The Asahi Shimbun that the company would not make such financial commitments if it did not plan to continue operations in Japan.

Slape is pinning his hopes on its online supermarket business that will likely achieve greater sales in the future compared to those at brick-and-mortar outlets.

Pitching an “everyday low price” (EDLP) pledge, a trademark strategy of Walmart, Seiyu has strove for a recovery of its earnings.

However, Walmart Japan Holdings posted losses for the second consecutive year since 2015 when it become a stock company.

The company broke even in the fiscal year through December 2017.

Stressing that Seiyu is moving forward in putting the company back in the black, Slape indicated his plan to renovate aging outlets at a pace of 40 to 50 outlets annually.

(This article was written by Mana Takahashi and Ryuhei Tsutsui.)

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