Cost of quitting South Korea and Germany blamed
Wal-Mart, the world's biggest retailer, has unveiled its first drop in profits in 10 years, blaming the cost of exiting South Korea and Germany.

The US-based company recorded profits of US$2.08 billion (£1.10 billion) for the three months to July 31, compared to US$2.8 billion (£1.48 billion) for the same period last year.

During the second quarter, the group disposed of its businesses in South Korea and Germany.

The retailer said it would record a loss of US$863 million (£457.2 million) for the sale of the German division.

Sales for the second quarter were up 11.3 per cent to US$84.5 billion (£44.77 billion), compared to the same period in 2005.

Wal-Mart Stores president and chief executive officer Lee Scott said: 'Some of the same issues affecting our customers - higher utility costs and gas prices - are impacting on many corporations, including Wal-Mart. We find it encouraging that we continue to increase market share in food and consumables during this time.'

The retailer revealed its withdrawal from Germany at the end of last month. It pulled out of South Korea in May.

Wal-Mart operates 6,400 stores in 15 countries and owns the Asda supermarket chain in the UK.

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