Wal-Mart to Abandon Germany – New York Times
Wal-Mart Stores, admitting defeat in Germany’s giant but cutthroat retail market, announced Friday that it would sell its 85 stores here to a German retailer, incurring a loss of $1 billion.
For those of you who aren’t familiar with the American company Wal-Mart
, it is the largest retailer in the world. It has been extremely successful in the U.S., Canada, and Mexico but has had mixed results in other countries. The company receives constant criticism for, among other things, using its size to push around its suppliers. It appears that Wal-Mart was less successful when the suppliers had less to lose.
While Wal-Mart’s vast size gives it enormous leverage in purchasing clothing and other goods, it must buy much of the food for its German stores locally. And there, it lacks the muscle of Aldi, which has 4,100 shops and a presence in nearly every town in the country.
The article also mentions a couple of cultural gaffes committed by Wal-Mart such as instructing clerks to smile at customers. Seems Germans aren't used to service with a smile. Maybe Germany needs a 4 million smiles
campaign like the one Singapore instituted to greet the attendees of the IMF and World Bank meetings in September.