After 17 years in the country, the company feels the time is right to optimize its nearly 400 stores.

Wal-Mart is acting after closing stores in Shenzhen, Shanghai and Zhengzhou since the end of last year, which it referred to as an "adjustment in business strategy".

Recognizing the development potential in the retail industry created by rapid urbanization and emergence of the middle class, Li Ling, senior director of corporate affairs at Wal-Mart China Investment Co Ltd, said the company's business has entered a new phase, focusing on the quality of individual stores.

Meanwhile, France-based Carrefour SA closed six stores in China from 2010 to 2012 and British chain store Tesco PLC shut four last year.

Surging rents are to blame for a contraction among foreign chain stores in the country, according to an industry insider.

Zeng Lingtong, an expert with The Beijing Enterprise Management Consulting Firm, said retailers have reached a "peak season" to renew rental contracts with landlords for stores that opened before the year 2000.

Foreign retailers, encouraged by soaring market expectations, expanded rapidly in China in past years, overlooking challenges in some locations to gain profit growth.

To reduce the high costs of maintaining such stores, they have to put an end to these operations, Zeng added.

wangzhuoqiong@chinadaily.com.cn