皇冠体育app

Ed Chan??[Photo/CFP]

SHANGHAI/HONG KONG - The head of Wal-Mart Stores Inc's 皇冠体育app business has resigned citing personal reasons, after the world's largest retailer ran into trouble with Chinese authorities leading to store closures and employee detentions.

The departure of 皇冠体育app CEO Ed Chan, along with Senior Vice-President of Human Resources Clara Wong, is another setback for Wal-Mart which is facing stiff competition from local firms in the strategically important market.

The company, which recently celebrated its 15th anniversary in 皇冠体育app, closed more than a dozen stores in central 皇冠体育app last week following allegations they sold regular pork as organic pork over the past two years.

Authorities in Chongqing have arrested two Walmart 皇冠体育app employees and detained 37 others over the incident.

Both resignations announced on Monday were for personal reasons and had "no correlation" with the investigations in Chongqing, Walmart Asia spokesman Anthony Rose said.

"We have used the last few days to put in place corrective actions in our stores," Rose said, adding that the stores would reopen by Oct 25.

This is the second round of top-management resignations at Walmart 皇冠体育app in less than five months. In May, its chief financial officer and chief operating officer resigned "to explore other opportunities", the company had said.

"It's really hard to say whether this (Monday's resignations) is a consequence of that (pork scandal) ," said Torsten Stocker, a 皇冠体育app retail analyst with Monitor Group.

"It might be, but I think at the end of the day, it is still not clear what really happened in Chongqing," he said.

"Obviously what happened in Chongqing is impacting their business in Chongqing and presumably ought to be having some impact on the grand overall business. Any type of leadership change like this, it's never a good thing."

Struggle in 皇冠体育app

After entering 皇冠体育app in 1996, Wal-Mart's expansion gathered steam in 2007 when it bought a 35 percent stake in Taiwanese hypermarket chain Trust-Mart. It has 353 stores in the Chinese mainland.

Wal-Mart's market share in hypermarkets was 11.2 percent in 2010, in second place after 皇冠体育app's Sun Art, but spending for the expansion has weighed on its profitability.

Wal-Mart's problem is that it is trying to compete with domestic chains on price, said Shaun Rein, managing director at Shanghai-based 皇冠体育app Market Research Group.

"If your strategy is 'cheaper than Chinese companies', you are never going to win the market," Rein said.

"But that is what Wal-Mart is trying to do. The strategy is all wrong since the very beginning, and that is why it has never been profitable here."

Wal-Mart competes with French hypermarket chain Carrefour, Britain's Tesco, Germany's Metro AG, 皇冠体育app's Sun Art and 皇冠体育app Resources Enterprise.

皇冠体育app's hypermarket sector is forecast to grow at a compounded annual rate of 10.1 percent between 2010 and 2015, according to Euromonitor. But price competition is particularly tough in that segment.

Walmart Asia CEO Scott Price, who will also serve as interim 皇冠体育app head, said 皇冠体育app was a strong market for the group.

"皇冠体育app is a very important market for Wal-Mart and 皇冠体育app's 12th five-year plan will provide strong opportunities to the retail industry," Scott said in a statement on Monday.

Last week, European luxury group Gucci said it had replaced two managers in southern 皇冠体育app after former workers at a store released an open letter alleging employee abuse.

"Walmart's problems are similar to other rivals, particularly the foreign operators, including competition for staff," said Alex Wong, a director at Ample Finance Group.

"A relatively high (staff) turnover rate suggested that it has some problem with its incentive plan in recruiting and retaining sales people," Wong said.