The company that so many people seem to like hating, Walmart, has announced an interesting change in its international line-up: according to the Wall Street Journal the company is exiting Germany by selling its 85 German stores.
Walmart is often portrayed as a steamroller of cheap foreign labor-power progress, and when I’m deep in the Midwest, it’s hard not to be aware of the influence — and popularity — of Walmart on the local communities.
The company also has a level of confidence in itself that’s sometimes breathtaking too. In Versailles, Missouri, for example, Walmart is actually building a newer Super Walmart directly behind its existing Walmart store: the two buildings co-exist and once the new one is ready, they’ll just rip down the older, smaller building and pave it over as an extended parking lot. Most other companies would just add square footage to the existing retail venue.
But in Germany, somehow, the Walmart approach of low prices coupled with unusual employment rules and a curious mix of hands-on and hands-off service just hasn’t worked out very well.
The WSJ explains: “In Germany, since it entered by acquiring two smaller chains eight years ago, it ran up against strong headwinds from shoppers, rivals and employees. German shoppers, accustomed to buying goods strictly based on price, were turned off by many of its American approaches such as grocery baggers.”
This isn’t the first time that the Walmart formula has failed overseas either: it was just a few years ago that it sold its South Korean stores for similar reasons, departing that thriving economy. As the BBC reported at the time, “Shoppers, especially women, had been dissatisfied with the food and drinks on offer” and Walmart rep Mike Duke explained: “It became increasingly clear that in South Korea’s current environment it would be difficult for us to reach the scale we desired.”
The point of this story is that while it’s common for people to portray very large companies as behemoths, as unswayable powerhouses that can’t be stopped or changed, the fact is that any merchant, even one as large as Walmart or Home Depot, can be brought down by the ultimate power of the consumer wallet. No sales = no company.
This also holds true online, of course, and it’s one reason that so many startups take on the market leaders in their segments, whether it’s a competing search engine, online email service, instant messaging protocol, friend networking site, or full-blown productivity suite. It’s not always easy to compete with the Big Dogs, but it’s sure worth doing, and it’s definitely important that those of us at the head of the adoption curve keep our eyes open too.
Because it’d be depressing to think that everything’s already invented, set, figured out and that the Web today is going to inevitably be the Web tomorrow too.
For the record, Walmart now only has a presence in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. Home Depot has a more limited international footprint: U.S., Mexico, Canada, St. Thomas and Puerto Rico.