Walmart pull out of Germany

www.bloomberg.com...

This article shows that not all countries agree sell for less business model. The giant retailer is also pulling out of South Korea and have not shown profit in the UK. I have to wonder what caused them to fail totaly in a country and what political forces may have strained the retailer. Please note, I did not intend for this to be a Walmart bashing thread but for serious discussion on why such a successful retailer in the US is not competative enough in other countries.

I'm surprised no one posted this story earlier.

I guess the Walmart Executives figured they could model their foreign stores on American tastes. Guess they guessed wrong.

Sy Schlueter, chief executive of investment house Copernicus in Hamburg, said Wal-Mart had trouble winning over German consumers, who tend to be very price-focused and would rather drive to a different store if they know they can buy something cheaper. National discounters such as Lidl GmbH and Aldi Einkauf GmbH put the heat on Wal-Mart's sales, he said, by offering the same products at competitive prices.

Furthermore, Schlueter said consumers rejected some of WalMart's signature features, like stores outside of town centers, employees required to smile and heartily greet customers, or baggers at checkouts.

www.theledger.com.../20060729/NEWS/607290444

Being new to retail, I find it hard to be friendly and sincere to each and every customer. And I consider myself a people person.
It also appears that Walmart did not place this German venture as well as it should have . Germany is the third largest for retail goods--behind the US and Japan.
Walmart just couldnt' pass this one up:
service.spiegel.de...

It is worthwile mentioning that the German economy has been in a serious slump for the past two years, and that consumers in Germany have taken to cheaper wholesalers. (Like the Lidl you´ve mentioned).

So the push to lower priced wholesalers can be blamed on the German economy IMO.

Culture is an issue because I am a Canadian and some of the biggest retailers up here... fabulously successful up here tried to crack the US market and couldn't do it. Only a handfull have done it. They always blamed it on cultural differences even though the cultures between the two countries are not that different.

In Germany I can see that the labour market is not nearly as flexible as it is in the Americas.

In the case of South Korea it could be anti-Americanism that did in Walmart.

In England it may just be a very competitive market although when I was there I saw few large stores?

This is a little off-topic, but in my city, Wal-Mart is highly successful because they have the lowest prices in town. By a far margin, too.

I just don't understand how they could get out-priced overseas.

Germans don't like being treated with smiles and overly friendlyness. They like to be treated like kings and queens, only be addressed when they permit it and be left alone for the rest.

Germans also prefer german stores over anything foreign, especialy if its an american store. Aldi and Lidl are hard to compete with since they already offer the lowest imaginable prices.

I experienced how hard Staples has had it to get a foothold in Germany, with competition from European giants like Viking Direct and other office depots.

It's the Germans' loss.

Long live Wal-Mart!

I would have to go with the National unity for the most part in Germany. I think the Brits have a different lifestyle that I just don't think Walmart fits into as well as some anti-American feelings (flashback PM Tony Blaires rerun for office). As for South Korea, I'm not sure there is not that much animosity against the US, but I could easily be wrong. We have a close relation with business with ports, Handai plants and american Interest in SK. I think is may be more of just not having the market for that type of venue.

Originally posted by GradyPhilpott
It's the Germans' loss.

Long live Wal-Mart!

lol I dont think so not everything what works in the US works overseas, and its very difficult to underbid the Aldi and Lidl prices seeing as they can dictate the prices here in Germany.

This is a little off-topic, but in my city, Wal-Mart is highly successful because they have the lowest prices in town. By a far margin, too.

I just don't understand how they could get out-priced overseas.

Remember geography is a factor, in Europe in general and the UK in particular. Consumers do not have to travel the same distances as shoppers in the States do. More importantly it's not uncommon to find a number of large discount stores in all competing with each-other within a small radius of most towns. Perhaps they don't carry the range of goods Wall Mart does but they have been matching them on price. Wall Mart are late comers to the UK market which is pretty cut throat compared to the rest of Europe. However it's not much of a withdrawal as Wall Mart owns the UK supermarket chain ASDA, which is second or third largest in the UK. I wouldn't put Wall Marts failure down to anti Americanism. I'm don't think the average Wall Mart customer gives a toss about who owns the store. Don't forget, McDonalds sell more burgers in France than anywhere else in the EU.