NEW DELHI - Executives from U.S. retail
giant Wal-Mart toured Indian stores on Thursday as they work on
a deal that could change the face of the country's $300 billion
retail sector and has sparked fears of mass job losses.
In New Delhi, over 100 demonstrators waving banners and
shouting slogans marched on government buildings to protest
against the entry of the world's largest retailer into India.
Some broke through police barricades and burned an effigy
of a dummy with "Wal-Mart Down" scrawled on it.
Activists burn an effigy of Wal-Mart Vice Chairman Mike Duke at a protest in New Delhi, India, Thursday, Feb. 22, 2007. Duke arrived in India on Thursday for talks with India's Bharti Retail Pvt. Ltd. on hammering out details of deal between the two companies to set up a chain of supermarkets and big-box stores across India, the American company said. (AP Photo/Gurinder Osan)
"Go back Wal-Mart," protesters shouted, waving placards
saying: "Save Small Retailers."
But there were no protests as Wal-Mart Stores Inc.
Vice Chairman Michael Duke, accompanied by venture partner
Rajan Mittal of Bharti Enterprises, visited a mall and a
hypermarket in a Mumbai suburb and checked out products on
Wal-Mart and Bharti plan a joint venture for cash-and-carry
in a retail sector that is dominated by small family-run
stores. The sector is forecast to more than double by 2015, and
has attracted the interest of other top global retailers such
as Tesco Plc. and Carrefour.
Small shopkeepers fear Wal-Mart could put many of an
estimated 40 million Indians who depend on retail out of work.
"The earnings for our small store keep me, my younger
brother and sister and my parents alive," said Amrit Prakash,
26, one of the protesters, who owns a small grocery store in
"If Wal-Mart comes, they will sell goods at wholesale
prices which will be cheaper and I will have no customers. I
simply can't compete with these big supermarkets ... what will
happen to me and my family? I'm worried we'll end up on the
His fears have strong political resonance.
Sonia Gandhi, head of the Congress Party that leads India's
coalition government, raised her concerns about the "Wal-Mart
effect" on retailers in a letter to the prime minister that was
leaked by Indian media.
Duke was expected to hold talks with government and Bharti
officials in New Delhi, but no specific business announcement
would be made, Wal-Mart said in a statement.
Duke was in India "to learn more about the market
first-hand and to further explore the wholesale cash-and-carry
business," Wal-Mart said, adding it was a routine trip.
"We look forward to partnering (Bharti) to build backward
linkages with farmers and suppliers through a robust and
efficient supply chain," the U.S. group added.
Wal-Mart, which is also discussing how to provide Bharti
with technology support, said it hoped to increase the amount
of goods it sources for its international operations from India
from $600 million last year.
Analysts say investments in the supply chain, which is
hamstrung by poor infrastructure, from refrigerated trucks to
warehouses, would cut the number of middlemen and help reduce
spoilage, estimated at nearly 40 percent of total output.
Bharti Retail Ltd., wholly owned by Bharti Enterprises,
said earlier this week it would spend up to $2.5 billion by
2015 to build hypermarkets, supermarkets and other stores.
"Maybe a few years down the line, when they have a bigger
presence, we can see the impact, but right now no single firm
has the clout to make or break this market," said one analyst.
Reliance Retail, part of Reliance Industries Ltd., is investing $5.6 billion in some 700 stores, while
ITC Ltd., the Birla group and Pantaloon Retail Ltd.
- India's top retailer -- are all ramping up.
But small shop owners are concerned at what they call
Wal-Mart's "backdoor entry" into the sector.
Foreign multi-brand retailers' access to India is
restricted to cash-and-carry and franchise operations, the
route chosen by Metro AG , Shoprite Holdings
and Marks & Spencer Plc..
"We believe Wal-Mart is going to ruin this country and
millions of people will lose their jobs," said Dharmendra
Kumar, campaign organizer in New Delhi for India FDI Watch, a
coalition of trade unions, traders, students and communist
Additional reporting by Adeel Halim in Mumbai
Copyright 2007 Reuters