Wal-Mart (WMT.NYSE) announced Greg Foran as the new chief executive of Wal-Mart China, in hopes of a fresh start for China’s second-largest megastore operator, The Wall Street Journal reported. The company faced fierce criticism last October, when it temporarily closed 13 stores and had two employees arrested over the mislabeling of ordinary pork as organic. “It’s clear that Wal-Mart believes it fell off its original path and they want to bring business back under control in China,” said Tian Guanyong, an independent retail consultant in Beijing. Foran has no experience in China, which may signal that Wal-Mart is focusing on Western modes of doing business. Wal-Mart plans to expand its current number of 370 stores in to second- and third-tier cities. The company reported that sales at stores open at least a year in China rose 6% year-on-year, but customer visits fell 7%. Wal-Mart’s low-cost business model faces challenges in China, where small retailers and local businesses do not abide by costly restrictions which multinational firms must follow.
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