Posted on 08/06/2006 5:50:50 PM PDT by voletti
WIESBADEN, AUGUST 5: A week after Wal-Mart Stores announced that it would pull out of Germany, Roland Kogel was wandering through the aisles of a somewhat threadbare Wal-Mart in a strip mall in this western German city.
‘‘Why are they giving up now?’’ he asked. ‘‘They have good prices and a good variety of products’’.
Yet Kogel, 54, confessed that he never bought groceries at Wal-Mart. Food is cheaper at German discount chains. He also does not visit this store often, because it is on the edge of town and he does not own a car. His one purchase for the day was tucked under his arm: a neck pillow.
Shoppers like Roland Kogel help explain why Wal-Mart raised the white flag in Germany, the site of the company’s first foray into Europe. After nearly a decade of trying, Wal-Mart never cracked the country — failing to become the all-in-one shopping destination for Germans that it is for so many millions of Americans.
Wal-Mart’s problems are not limited to Germany. The retail giant has struggled in countries like South Korea and Japan as it discovered that its formula for success — low prices, zealous inventory control and a large array of merchandise — did not translate to markets with their own discount chains and shoppers with different habits.
Over all, Wal-Mart is still expanding outside the US, particularly in markets where it entered by acquiring a strong retailer. Still, given Wal-Mart’s formidable record at home, the company’s recent setbacks have exposed a rare vulnerability overseas.
‘‘It is a good, important lesson, a turning point,’’ an international spokeswoman for Wal-Mart, Beth Keck, said. Among other things, she said, Wal-Mart now cares less whether its foreign stores carry the name derived from its founder, Sam Walton, as the German Wal-Marts do. Seventy per cent of Wal-Mart’s international sales come from outlets with names like Asda in Britain, Seiyu in Japan or Bompreço in Brazil.
In Germany, Wal-Mart stopped requiring sales clerks to smile at customers — a practice that some male shoppers interpreted as flirting — and scrapped the morning Wal-Mart chant by staff members. ‘‘People found these things strange; Germans just don’t behave that way,’’ said Hans-Martin Poschmann, the secretary of the Verdi union, which represents 5,000 Wal-Mart employees here.
Wal-Mart’s changes came too late for Germany, but they could help it crack other markets, like China, where it already has 60 stores and 30,000 employees. Far from being chastened by its setbacks, Wal-Mart is forging ahead with an aggressive programme of foreign acquisitions.
Wal-Mart Germany, with 85 stores and $2.5 billion in sales, is almost a footnote for a company focused on Asia and Latin America. But the problems it encountered here have echoes elsewhere. For example, it never established comfortable relations with its German labour unions.
‘‘They didn’t understand that in Germany, companies and unions are closely connected,’’ Poschmann said.
Wal-Mart will soon get another chance to deal with organised labour, albeit of a less independent sort. In China, the state-controlled All-China Federation of Trade Unions is organising workers in Wal-Mart’s stores.
MARK LANDLER & MICHAEL BARBARO
This cuts both ways.
Auchan is big across Europe but they didn't seem to last in the US.
Gesundheit.
We have FIVE Super Centers in the STate Capitol of the STate of Mexico. Toluca, I see their parking lots full, they seem to be doing well.
Same with Aldi as far as I heard. Looks like sociologists might yet become winners of the globalisation process :)
Ping!
They don't require employees to smile at customers in America, either. And I don't know about the Germans, but I would find morning "Wal-Mart" chants a little odd.
When Wal-Mart opened a store in my town a year or so ago, they had a big party and people were dancing.
I thought that was odd, too.
I guess I don't understand Wal-Mart culture ...
I didn't read but three words of this artice including the headline, but I need to say that unions are just smaller verions of communist and socialist regimes serving no purpose if it is not in the best interest of the elite.
That's easy to say while enjoying the rights that Unions fought for. Of course they are corrupt and only looking out for their ends, but the other side is doing the same thing.
Aldi is a riot. There is one in my home town. Everytime I go back and drive by, there are no cars in the parking lot. I asked my mom why, and she said because it's closed. It's closed at 7PM on a weeknight? Yep. It's closed on Sunday? yep. Aldi has bankers hours. Kinda strange for a supermarket. I guess if you are a stay at home mom it's great. But if you have a normal job, you can't get there during their business hours. STUPID!!!
Habit and cultures of countries are very good words to think about. Maybe Walmart should have done it's homework on both.
What is the old saying "When in Rome, do as the Romans do".
In Germany, people tend to shop locally as their neighborhoods usually feature stores within walking distance of their homes. I know this because when I hosted German exchange students, they were bewildered by the way we shop over here - the way we fill up our car trunks with enough groceries and household goods to last two weeks or more. Over there, they pretty much walk down to the local grocery and get maybe a sack or two of product at a time.
They also found it peculiar that the nearest "store" from my house was about 4 miles away. Like most suburbs, my neighborhood is zoned residential and you have to get out on the main road to see any stores at all. That is not like it is in Germany - where the stores are embedded in residential areas and actually part of any typical neighborhood.
Why did you feel the need to say something stupid if you didn't bother to read the article?
The only things I would buy at Aldi are in boxes or cans. I wouldn't allow the meats or vegetables to be consumed by Ethiopians.
These same Unions today are nothing but supporters of left-wing politicos.
That's right. Most Germans also prefer small 'specialist stores' (butcher, baker, electronics store) to big all-in-one solutions. And the tendency to buy fruit and vegetables that are "ecologically produced" is mostly a support for small farmers whose only market is the "ecological niche". Although its an large exaggeration, one could say that Germans tend to distrust big business the way Americans tend to distrust big government.
Without a doubt.
They are blaming the countries instead of their own lack of market research.
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