YEAR IN REVIEW 2000-12-25 (1)

DAVID GHITELMAN

BENTONVILLE, Ark. -- Wal-Mart Stores here continued to step up its penetration of the retail food business this year, when for the first time ever volume at the company's supercenters surpassed that at the discount stores.

Wal-Mart also began rolling out supercenters in the U.K., opening its first Asda-Wal-Mart Supercenter in Bristol in July. In other moves abroad, the company increased its investment in Mexico and voiced "disappointment" at the results from its stores in Germany.

Back in the United States, Wal-Mart continued to expand cautiously the number of its Neighborhood Market stores, still insisting these openings were part of a continuing test of the conventional supermarket-size format and not a rollout.

Here follows a look at some of the most important developments for the world's largest retailer in 2000:

The news that supercenter sales had surpassed those at discount stores came at an October analysts' briefing. At that briefing, Wal-Mart also said it intended to open from 170 to 180 supercenters in 2001, in contrast to the 160 it opened this year. In addition, the company said it would open two more food distribution centers and two more fresh food distribution facilities in 2001.

The Asda-Wal-Mart Supercenter was "a new concept in retailing," a company spokesman told SN, combining "the best of Wal-Mart with the best of Asda." Wal-Mart said it planned to open 10 supercenters in the U.K. over the next five years.

In Germany, Wal-Mart has been less happy with its results. John Menzer, chief executive officer of Wal-Mart's International division, said the company's "disappointing" results there were largely the result of labor and regulatory difficulties. "Our problem in Germany is not customer acceptance," he said. "We're a pioneer, and pioneers get the arrows."

In Mexico, Cifra changed its name to Wal-Mart de Mexico (also known by its stock symbol, Wal-Mex) in March, and the next month Wal-Mart purchased an additional $600 million worth of Wal-Mex stock, giving it a 60% share of the Mexican company.

Closer to home, Wal-Mart said in October it plans to open 15 to 20 Neighborhood Markets in 2001. The company also said it is using its experience at the conventional-size stores to improve operations at its supercenters, particularly to develop ways to use store labor more efficiently.

The year began with Lee Scott succeeding David Glass as Wal-Mart president and CEO, with Glass remaining with the company as chairman of the executive committee. Analysts told SN at the time to expect Scott to focus on growing the company through improved logistics.