Sunday, July 30, 2006

Wal-Mart to Abandon Germany

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.


Anonymous Anonymous said...

Interesting. I just watched a documentary titled "Wal-Mart: The High Cost of Low Price" and I wonder how much did this have to do with the fact that workers in Germany are unionized. Funny comment about the smiles. They should have known that Germans are pretty serious people and don't like to be fooled with bad apples (the ones shiny on the outside and bad on the inside) i.e. facade smiles from employees that barely make ends meet.

4:01 PM  
Blogger a singapore economist said...

It sounds like Wal-Mart's problems in Germany had little to do with labor and more to do with the number of large discount retailers that were already established.

Haven't seen the movie yet. I'll have to check it out.

4:28 PM  
Anonymous Buy Kamagra said...

Definitely Walmark is a big company because most of the countries that I've been There is one of their supermarket and it is great because it shows that it is an established company.

10:46 PM  
Anonymous miami internet said...

it is not about the smiles, it is because when you are giving a service, you must present yourself as a professional and act like that, not as a friend or a friendly behavior which makes the service very informal

11:57 PM  
Anonymous miami office space said...

I think it is dufficult when they that is their culture i just think if they have dealt with it differently perhaps it wouldnt be necesary to close it down maybe just putting in a little of their culture it might have help them.

1:49 AM  
Anonymous Cheap Viagra Online said...

You know Germanic hates to smile often, that's the main reason of wall-mart defeat.

12:18 AM  

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