Saying the move was in the best interest of company shareholders and customers, Wal-Mart vice chairman Mike Duke admitted that "it became increasingly clear that in South Korea's current environment it would be difficult for us to reach the scale we desired." Wal-Mart launched its South Korean unit in 1998. Last year, the company reported a loss of Won 9.9 billion ($10 million) on sales of Won 750 billion ($787 million).

This news comes less than two months after French retailing giant Carrefour announced the sale of its Korea unit to Eland, a locally based clothing-maker and distribution group. According to company officials, Carrefour's divestment was part of a larger effort to withdraw from activities that are either non-core or not profitable enough.

According to the US Department of Agriculture's Foreign Agricultural Service Department, South Korea's gross domestic product growth for 2005 was 4%. Its economy, which grew 4.6% in 2004, is slowing under the weakening pace of export growth and the rising value of the won. Seh Won Kim, a researcher with the department, says overall economic performance will depend greatly on external conditions, including international oil prices and appreciation of the won.