Life gets worse for Wal-Mart in Japan

It is hard for Wal-Mart (NYSE: WMT) to leave Japan, even though its sales there look awful. There are only so many large markets, and to keep its international growth moving, it needs to be in almost all of them.

The world's largest retailer did have a tough time in the big Asian market last year. The operation there said "it now expected to post a group net loss of 20.9 billion yen ($196 million) for calendar 2007, instead of its previous forecast for a loss of 10.4 billion yen, " according to Reuters. Same-store sales for the year dropped just over 1%.

The bad thing about Japan is that sales are flat. The good thing is that the government there allows Wal-Mart to operate without significant regulation. The politics of Japan are stable.

Wal-Mart has had success in China and hopes to move into India, but those countries have many more restrictions for doing business. At this point, Wal-Mart cannot even enter India under its own name. In China, Wal-Mart workers are members of unions and the communist party has a wing in the retailer.

Perhaps a market with modest potential and a large population is better than those with big business risks.

Douglas A. McIntyre is an editor at 247wallst.com.