Walmart Inc.'s unit in Chile has asked the government to help protect its stores and workers from riots and other protest violence that has rocked that country for a month.
As of Monday, Walmart Chile said in a news release, 34 of its supermarkets have been set on fire, with 17 of those destroyed. In addition, more than 1,200 acts of looting and arson have affected 128 stores.
The unit requested the protection "to ensure the operation of our stores and not affect the supply of basic goods to our customers," according to the release. "The safety of our associates and customers has been our priority from day one and, for this reason, as a company we must take the necessary protective measures, both physically as well as legally."
At the same time, the company said, it is working in coordination with local authorities, "who have been fundamental to responding to residents' needs."
Protests by high school students that began in early October over a 4-cent hike in public-transit fares escalated on Oct. 18 into large-scale riots over issues that include income inequality. In the ensuing weeks of violence, 24 people have died and about 2,000 have reportedly been injured.
Walmart Chile operated 377 stores as of July 31, mostly under the Lider banner, and employs nearly 50,000 people. Based in Santiago, the unit is currently led by interim President and Chief Executive Officer Enrique Ostale.
Walmart President and Chief Executive Officer Doug McMillon addressed the situation last week in the Bentonville-based retailer's third-quarter earnings report. "Our business in Chile has been seriously affected by civil unrest," he said.
"The safety of our associates and their families along with our customers is top of mind there," McMillon said. "We experienced a large number of store closures in October as a result of the recent events and many remain closed at this time."
David Marcotte, senior vice president of retail insights for Kantar Consulting, was in the offices of Walmart Chile on Oct. 18. Just hours earlier, Marcotte said, he had visited some of the stores that were later destroyed.
By the next day, Marcotte said, most stores in the city were closed because of the looting and rioting. All retailers were affected and Walmart was not singled out, he said. "It was not anti-American," Marcotte said. "Walmart in Chile is not thought of as American," he said, because the stores bear the name of the chain Walmart bought out in 2009. "You don't see the name Walmart anywhere."
After working in Chile for 25 years, Marcotte said he never expected to see anything like the violence of the past month. On the positive side, though, the country prone to earthquakes and tsunamis is prepared for unforeseen disaster, he said.
"Everybody is used to dealing with a cataclysmic event that no one planned for," he said. "My assumption, knowing the people down there, is they're going to treat it like an earthquake. ... But the most important thing is they're going to work extremely hard and bring in people from Argentina and other markets to see how quickly they can get the stores back up and running."
Marcotte estimates it will take Walmart about a month to assess the damage to its Chilean stores. Then the retailer will evaluate where and how to begin the recovery process, he said, but he predicts most of the destroyed and damaged stores will be rebuilt.
"Real estate is expensive there," he said. "The land's too valuable and it just doesn't make sense to let these [stores] go."
"In the meantime, it's going to be a pretty good hit to revenues," Marcotte said.
Unlike Brazil, an underperforming market Walmart exited last year, Chile "has been an extremely good market for them," Marcotte said. "So my assumption is they'll just rebuild it and carry on."
Business on 11/21/2019