1 Walmart to close 269 outlets (Jana Kasperkevic in The Guardian) Walmart is closing 269 stores, more than half of them in the US and another big chunk in its challenging Brazilian market. The stores being shuttered account for a fraction of the company’s 11,000 stores worldwide and less than 1% of its global revenue, but according to workers’ group Making Change at Walmart, this announcement will affect 10,000 US employees.
More than 95% of the stores set to be closed in the US are within 10 miles of another Walmart. The Bentonville, Arkansas, company said it is working to ensure that workers are placed in nearby locations. The store closures will start at the end of the month.
In 2011, Walmart Express marked the retailer’s first entry into the convenience store arena. The stores are about 12,000 square feet and sell essentials like toothpaste. But the concept never caught on as the stores served the same purpose as Walmart’s larger Neighborhood Markets: fill-in trips and prescription pickups.
The announcement comes three months after Walmart CEO Doug McMillon told investors that the world’s largest retailer would review its fleet of stores with the goal of becoming more nimble in the face of increased competition from all fronts, including from online rival Amazon.com.
Walmart operates 4,500 in the US. Its global workforce is 2.2 million, 1.4 million in the US alone. Walmart has warned that its earnings for the fiscal year starting next month will be down as much as 12% as it invests further in online operations and pours money into improving customers’ experience.
On Thursday (Jan 7), the People's Bank of China cut its reference rate for the yuan by 0.5 per cent, the most since August's 2 per cent devaluation and the eighth straight day that the PBOC has guided the yuan lower. Here's why this matters:
A It raises fears about how bad is the slowdown in the world’s second-largest economy. Markets fear that Beijing, in a bid to help its exporters, is allowing the yuan's rapid depreciation to accelerate, which would mean China's economy is even weaker than had been imagined, or that official figures show.
B It hits Asian exporters. A weaker yuan is bad news for export-oriented economies like Singapore, Hong Kong, South Korea and Taiwan as their exports will be more expensive to Chinese buyers. Their exports to other countries will also have to compete against Chinese rivals who have the advantage of a weaker currency.
C The resulting capital outflows hits Asian currencies and commodities. China is the world's biggest user of energy, metals and grains and the yuan's sharp fall exacerbated the slump in the currencies of big commodity suppliers like Australia, New Zealand and Canada. Fears of a sharper slowdown in China's economy and market turmoil are also triggering a selloff in emerging-market assets by risk-averse investors.
D It could reignite an Asian currency war. Yuan devaluation will put pressure on Asian emerging economies like Vietnam, Malaysia and Indonesia to push down their own currencies to help their exporters and to prevent destabilising capital flows. As it did in the 1997 Asian financial crisis, a competitive spiral of currency devaluations could result.
E It hurts Asian banks.The more the yuan weakens against its trading partners' currencies, the greater the risk that corporate profits will be hurt and affect the region's banks. DBS CEO Piyush Gupta has warned that a yuan depreciation could lead to more corporate defaults by Chinese companies who have borrowed heavily in US dollars but have not hedged their loans. Servicing such debt has become much harder because of the yuan's sharp fall.