Why Walmart Can't Beat The Competition In Brazil

Walmart, pushing forward in Brazil
Walmart, pushing forward in Brazil
Graziele Dalbó

BRASILIA - There’s a strange section on Walmart Brazil’s website, strange at least for a retailer. It’s not the usual invitation to apply for a job, “Work with us,” but an invitation to make real estate deals with the huge multinational company. “If you own land or a building where it would be possible to install new Walmart Brazil stores, fill out the following form.”

That little announcement is evidence of Walmart’s insatiable appetite for expansion, an desire for growth that led to criticism of the company when the New York Times revealed last April the company’s massive use of bribes to expand in Mexico. Walmart used the bribes to accelerate the process of buying property and to secure store permits from public officials.

The scandal made the company's stock prices drop in Mexico and New York, and forced it to postpone plans for expansion in Mexico and Central America. It also led to a lawsuit by several pension funds in the United States, whose portfolios were affected by the decreased stock price. In Brazil, the company is not thinking about slowing down, but it still suffering from the effects of the scandal. And all eyes are on Walmart’s next moves.

Last year was a difficult one for the giant retailer’s global operations. The damage to its reputation from the corruption scandal left a mark on all of the company’s operations in the region. That is certainly the case in Walmart’s second most important market, Brazil.

According to the Brazilian Association of Supermarkets (known as Abras), Walmart Brazil had sales of $11.5 billion in 2011. The American company did not manage to beat the French giant Carrefour, which had $14 billion in sales the same year. Pão de Açúcar, which is also owned by a French company, is undeniably the market leader and had sales of $25.7 billion in 2011. Around 80 percent of Brazil’s retail market is controlled by foreign companies, which is one of the reasons there has been so much growth in that domain, as foreign capital is infused into the market.

Projections for the retail market in Brazil are promising. According to consulting firm A.T. Kearny’s Global Retail Development Index, Brazil has had the highest growth in the world in this sector for two years in a row, and a 15% increase just in this last year. Brazil is followed by Chile, China, Uruguay and India.

Eternal Third Place

Walmart first arrived in Brazil in 1995, and is currently present in 18 states, counting some 81,500 employees. But even with strong growth, the fight against Carrefour and Pão de Açúcar has been hard, and Walmart has not been able to gain an advantage.

For retail analysts, there is only one explanation for Walmart’s struggles in Brazil: the lack of synergy between the nine different brands and five different formats it is operating in the country. The company currently operates three different kinds of supercenters, three supermarket chains, a cash and carry wholesaler, a chain of smaller local stores and Sam’s club buyers’ club.

“Although it has been in the market for 17 years, Walmart has not yet been able to centralize its management,” said Roberto Nascimento, professor of business at the School of Publicity and Marketing in Brasilia. “Today the network has three different realities, one in the Northeast, one in the Southeast and on in the South. The differences in leadership among the different companies can explain this situation.”

Walmart Brazil’s CEO, Marcos Samaha, understands that perfectly well. In a teleconference with analysts to disclose the company’s results from the first trimester of 2012, he emphasized that the group would start the process of revamping its Brazilian operations. The idea is to unify communications between all of the different brands.

Another modification in progress is an effort to reduce the company’s cost structure in Brazil. The initiative includes a strategy called “Every Day Low Price” (EDLP). “We are seeing that this new strategy allowed us to reach much better results this year. In the first trimester, for example, we grew 8.6 percent,” Samaha stressed, adding that the chain is going to invest $636 million opening new stores.

Mexican Contagion

In spite of the fact that the bribe scandal happened in Mexico, Brazil is also cited as one of the countries with the highest risk of corruption for the company. "They are just accusations. I can assure you that were always working with our focus on integrity,” Samaha says.

In Mexico, the company is accused of having spent at least $24 million to pay mayors, town councilors and authorities that helped Walmart to expand. In that way, they were able to get building permits or they avoided the inconvenience of negative environmental impact studies. That same need for expansion is what prompted Walmart to advertise loudly its need for land and buildings in Brazil. In fact, the Mexican scandal has the Brazilian authorities watching the expansion process closely.

However, the path towards higher share values still has a major obstacle: Pão de Açúcar, and its leading role in the Brazilian retail market. French group Casino took control of the company last June after an abortive attempt by the previous owner to sell the company to Carrefour. Analysts are expecting that the new owners will pursue an even more aggressive strategy, which could mean increasing its lead over Walmart.

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The True Horrors Behind 7 Haunted Locations Around The World

With Halloween arriving, we have dug up the would-be ghosts of documented evil and bloodshed from the past.

Inside Poveglia Island's abandoned asylum

Laure Gautherin and Carl-Johan Karlsson

When Hallows Eve was first introduced as a Celtic festival some 2,000 years ago, bonfires and costumes were seen as a legitimate way to ward off ghosts and evil spirits. Today of course, with science and logic being real ghostbusters, spine-chilling tales of haunted forests, abandoned asylums and deserted graveyards have rather become a way to add some mystery and suspense to our lives.

And yet there are still spooky places around the world that have something more than legend attached to them. From Spain to Uzbekistan and Australia, these locations prove that haunting lore is sometimes rooted in very real, and often terrible events.

Shahr-e Gholghola, City of Screams - Afghanistan

photo of  ruins of Shahr-e Gholghola,

The ruins of Shahr-e Gholghola, the City of Screams, in Afghanistan

Dai He/Xinhua via ZUMA Wire

According to locals, ghosts from this ancient royal citadel located in the Valley of Bamyan, 150 miles northwest of Kabul, have been screaming for 800 years. You can hear them from miles away, at twilight, when they relive their massacre.

In the spring 1221, the fortress built by Buddhist Ghorids in the 6th century became the theater of the final battle between Jalal ad-Din Mingburnu, last ruler of the Khwarezmian Empire, and the Mongol Horde led by Genghis Khan. It is said that Khan's beloved grandson, Mutakhan, had been killed on his mission to sack Bamyan. To avenge him, the Mongol leader went himself and ordered to kill every living creature in the city, children included.

The ruins today bear the name of Shahr-e Gholghola, meaning City of Screams or City of Sorrows. The archeological site, rich in Afghan history, is open to the public and though its remaining walls stay quiet during the day, locals say that the night brings the echoes of fear and agony. Others claim the place comes back to life eight centuries ago, and one can hear the bustle of the city and people calling each other.

Gettysburg, Civil War battlefield - U.S.

photo of rocks and trees in Gettysburg

View of the battlefields from Little Round Top, Gettysburg, PA, USA


Even ghosts non-believers agree there is something eerie about Gettysbury. The city in the state of Pennsylvania is now one of the most popular destinations in the U.S. for spirits and paranormal activities sight-seeing; and many visitors report they witness exactly what they came for: sounds of drums and gunshots, spooky encounters and camera malfunctions in one specific spot… just to name a few!

The Battle of Gettysburg, for which President Abraham Lincoln wrote his best known public address, is considered a turning point in the Civil War that led to the Union's victory. It lasted three days, from July 1st to July 3rd, 1863, but it accounts for the worst casualties of the entire conflict, with 23,000 on the Union side (3,100 men killed) and 28,000 for the Confederates (including 3,900 deaths). Thousands of soldiers were buried on the battlefield in mass graves - without proper rites, legend says - before being relocated to the National Military Park Cemetery for the Unionists.

Since then, legend has it, their restless souls wander, unaware the war has ended. You can find them everywhere, on the battlefield or in the town's preserved Inns and hotels turned into field hospitals back then.

Belchite, Civil War massacre - Spain

photo of sunset of old Belchite

Old Belchite, Spain

Belchite Town Council

Shy lost souls wandering and briefly appearing in front of visitors, unexplainable forces attracting some to specific places of the town, recorded noises of planes, gunshots and bombs, like forever echoes of a drama which left an open wound in Spanish history…

That wound, still unhealed, is the Spanish Civil War; and at its height in 1937, Belchite village, located in the Zaragoza Province in the northeast of Spain, represented a strategic objective of the Republican forces to take over the nearby capital city of Zaragoza.

Instead of being a simple step in their operation, it became the field of an intense battle opposing the loyalist army and that of General Francisco Franco's. Between August 24 and September 6, more than 5,000 people were killed, including half of Belchite's population. The town was left in rubble. As a way to illustrate the Republicans' violence, Franco decided to leave the old town in ruins and build a new Belchite nearby. All the survivors were relocated there, but they had to wait 15 years for it to be complete.

If nothing particular happens in new Belchite, home to around 1,500 residents, the remains of old Belchite offer their share of chilling ghost stories. Some visitors say they felt a presence, someone watching them, sudden change of temperatures and strange sounds. The ruins of the old village have been used as a film set for Terry Gilliam's The Adventures of Baron Munchausen - with the crew reporting the apparition of two women dressed in period costumes - and Guillermo del Toro's Pan's Labyrinth. And in October 1986, members of the television program "Cuarta Dimensión" (the 4th dimension) spent a night in Belchite and came back with some spooky recordings of war sounds.

Gur Emir, a conquerer’s mausoleum - Uzbekistan

photo of Gur Emir (Tomb of Timur) i

Gur Emir (Tomb of Timur) in Samarkand, Uzbekistan

Chris Bradley/Design Pics via ZUMA Wire

The news echoed through the streets and bazaars of Samarkand: "The Russian expedition will open the tomb of Tamerlane the Great. It will be our curse!" It was June 1941, and a small team of Soviet researchers began excavations in the Gur-Emir mausoleum in southeastern Uzbekistan.

The aim was to prove that the remains in the tomb did in fact belong to Tamerlane — the infamous 14th-century conqueror and first ruler of the Timurid dynasty who some historians say massacred 1% of the world's population in 1360.

Still, on June 20, despite protests from local residents and Muslim clergy, Tamerlame's tomb was cracked open — marked with the inscription: "When I Rise From the Dead, The World Shall Tremble."

Only two days later, Nazi Germany invaded the Soviet Union, with the people of Samarkand linking it to the disturbing of Tamerlane's peace. Amid local protests, the excavation was immediately wrapped up and the remains of the Turkish/Mongol conqueror were sent to Moscow. The turning point in the war came with the victory in the Battle of Stalingrad — only a month after a superstitious Stalin ordered the return of Tamerlane's remains to Samarkand where the former emperor was re-buried with full honors.

Gamla Stan, a royal massacre - Sweden

a photo of The red house of Gamla Stan, Stockholm, Sweden

The red house of Gamla Stan, Stockholm, Sweden


After Danish King Kristian II successfully invaded Sweden and was anointed King in November 1520, the new ruler called Swedish leaders to join for festivities at the royal palace in Stockholm. At dusk, after three days of wine, beer and spectacles, Danish soldiers carrying lanterns and torches entered the great hall and imprisoned the gathered nobles who were considered potential opponents of the Danish king. In the days that followed, 92 people were swiftly sentenced to death, and either hanged or beheaded on Stortorget, the main square in Gamla Stan (Old Town).

Until this day, the Stockholm Bloodbath is considered one of the most brutal events in Scandinavian history, and some people have reported visions of blood flowing across the cobblestoned square in early November. A little over a century later, a red house on the square was rebuilt as a monument for the executed — fitted with 92 white stones for each slain man. Legend has it that should one of the stones be removed, the ghost of the represented will rise from the dead and haunt the streets of Stockholm for all eternity.

Port Arthur, gruesome prison - Australia

a photo of ort Arthur Prison Settlement, Tasmania, Australia

Port Arthur Prison Settlement, Tasmania, Australia

Flickr/Eli Duke

During its 47-year history as a penal settlement, Port Arthur in southern Tasmania earned a reputation as one of the most notorious prisons in the British Empire. The institution — known for a brutal slavery system and punishment of the most hardened criminals sent from the motherland— claimed the lives of more than 1,000 inmates until its closure in 1877.

Since then, documented stories have spanned the paranormal gamut: poltergeist prisoners terrorizing visitors, weeping children roaming the port and tourists running into a weeping 'lady in blue' (apparently the spirit of a woman who died in childbirth). The museum even has an 'incidence form' ready for anyone wanting to report an otherworldly event.

Poveglia Island, plague victims - Italy

a photo of Poveglia Island, Italy

Poveglia Island, Italy

Mirco Toniolo/ROPI via ZUMA Press

Located off the coast of Venice and Lido, Poveglia sadly reunites all the classical elements of a horror movie: plagues, mass burial ground and mental institute (from the 1920's).

During the bubonic plague and other subsequent pandemics, the island served as a quarantine station for the sick and anyone showing any signs of what could be Black Death contamination. Some 160,000 victims are thought to have died there and the seven acres of land became a mass burial ground so full that it is said that human ash makes up more than 50% of Poveglia's soil.

In 1922 a retirement home for the elderly — used as a clandestine mental institution— opened on the island and with it a fair amount of rumors involving torture of patients. The hospital and consequently the whole island was closed in 1968, leaving all the dead trapped off-land.

Poveglia's terrifying past earned it the nickname of 'Island of Ghosts'. Despite being strictly off-limits to visitors, the site has been attracting paranormal activity hunters looking for the apparition of lost and angry souls. The island would be so evil that some locals say that when an evil person dies, he wakes up in Poveglia, another kind of hell.

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