Five years after its ill-fated foray into the market, Wal-Mart has shown the first signs that it is finally beginning to turn things around in Germany. Like-for-like sales at the company's 95 German stores moved into "double digits" this month, with the country for the first time entering the list of "top performers" in Wal-Mart's international division. The introduction of the George clothing range into a handful of stores last year has proved particularly successful, and a rollout is now planned, said a spokesman. Operating losses were "well below" last year's levels, aided by strengthening gross margins, tightened cost control, and reduced inventory. Dresdener Kleinwort Benson analyst Simon Dunn said things appeared to be going considerably better than planned for Wal-Mart in Germany given the current economic climate and soaring unemployment figures. The news will come as a relief to Wal-Mart president Lee Scott, who admitted his job was on the line over Wal-Mart's performance in Germany, where the company has chalked up losses estaimated to run into several hundred million dollars. When asked in autumn 2000 if Wal-Mart would withdraw in three or four years' time if its German operations were still not profitable, Scott conceded: "If they're not profitable by then, I won't be around to make the decision." Analysts expect it to move into profit in Germany by the end of the next financial year. Wal-Mart will open its third new-build store this year in Bergkamen. Last year it opened two new stores, in Guenthersdorf near Leipzig and Pattensen near Hanover. l Local competition got even tougher this month when Aldi launched a round of price cuts sparking a price war estimated to have cost retailers hundreds of millions of euros in a market where margins are already wafer thin. Smaller supermarkets and independents will suffer the most if trading conditions worsen, said analysts, with Spar's German division likely to run into more problems after a disastrous year. Mintel analyst Bryan Roberts said: "This section of the market is under particular pressure." {{NEWS }}