It is possible, in the context of these developments, that some bitterness crept between the two partners, exacerbated later by a seeming clash of cultures. This was a clear indication that there would be no more joint plans to develop a front-end retail network. In July 2013, Bharti Retail returned 17 properties, which it had leased across the country to open Easyday stores, back to landlords. For some time, it was reconsidering its commitment to the partnership by pointing to “distant prospects of returns”. It is safe to assume that Bharti was viewing these developments with discomfiture. But Ikea, a single-brand retailer, spent lots of effort and time in negotiations to get a clarification on FDI rules in single brand retailing before it decided to expand in the country. The Swedish furniture retailer too has a proven record of lobbying in India. Here, Walmart should have tended to its garden the Ikea way. Unfortunately, the incident played into the hands of opponents of FDI rules in retail. It didn’t help that Walmart spent $25 million between 20 in India on various lobbying activities to facilitate its entry. That probe invited an investigation by India and consequently, led to the suspension of several top managers. Walmart is also smack in the middle of an internal anti-bribery probe launched in the US in November 2012. With the deteriorating outlook for generated profits, the retailer had to set priorities and revise its international expansion plans. Walmart has been facing a decline in like-for-like sales (a comparison of a year’s sales to the previous year’s sales of a company in its home market), closed several stores in China and has still to complete introduction of EDLP pricing (promise of the lowest available price) strategy in Latin America. Of course, FDI rules weren’t the only reason. Even on the cash-and-carry front, Walmart did not open a store in India for about a year despite earlier plans to open eight in 2013. The rules have discouraged other foreign retail majors too to invest in the country. The government eased rules in September 2012, paving the way for foreign retailers to enter the front-end retail format too.īut Walmart was reluctant to introduce this format as the rules were vague and restrictive. Previously, foreign retailers were allowed only in the wholesale, or cashand-carry, business, which Walmart took advantage of to enter India. The first reason has to be the vague FDI rules. The alliance promised much when it was launched six years ago, but delivered little. Actually, we could be forgiven for thinking that it took them so long to end it. When Walmart Stores Inc, the world’s biggest retailer, and Bharti Enterprises decided earlier this week to go their separate ways, there were few gasps or shake of heads.

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