Decision on future of Walmart partnership this month: Bharti
Johannesburg: Bharti Enterprises will take a decision this month on the shape of its partnership with global retail giant Walmart, including joining hands for operations in the country's multi-brand segment.
The group, which has a 50:50 joint venture with Walmart for wholesale cash and carry, is understood to be anxious after their partnership came to a standstill, with no new stores being opened.
"Within October, I would say, Walmart should have taken a decision of their vision for India and Bharti could have taken a decision whether it matches our aspirations," Bharti Enterprises Chairman and Group CEO Sunil Bharti Mittal said on the sidelines of the 2nd India-Africa Business Council (IABC) meeting here.
He said: "We are awaiting Walmart's final response to Indian retail and then we will evaluate our options."
While Mittal didn't elaborate on the future course of action, sources said the Indian partner is getting anxious as Walmart's indecision is affecting even their cash-and-carry venture, which runs Best Price Modern Wholesale stores.
"For the last several months, nothing has happened. No stores are being opened and it can't be in a standstill…some decision will have to be taken, it can't carry on being in the speculative phase," a source said.
Bharti Walmart runs 20 Best Price Modern Wholesale stores in cities such as Amritsar, Jalandhar, Kota, Bhopal, Ludhiana, Raipur, Vijayawada, Agra, Meerut, Lucknow, Jammu, Guntur, Aurangabad, Amravati, Hyderabad and Rajahmundry.
After the government allowed 51 per cent foreign direct investment in multi-brand retail in September last year, Walmart has sought clarity on aspects of the policy, specially the sourcing clause.
In July, it expressed inability to meet the norm requiring 30 per cent procurement from small industries, saying it could source only about 20 per cent.
The government subsequently diluted the clause to allow global multi-brand retailers to source 30 per cent of their products from small and medium enterprises only at the start of the business.
Walmart has also been probing alleged corruption practices at its local arm, after which its India head Raj Jain and CFO Pankaj Madan quit the company.
The company's USD 100 million investment in Cedar Support Services Ltd, a subsidiary of Bharti Ventures, is also being probed by the Enforcement Directorate for alleged violation of norms.