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.
Just for the record: I’m living in Germany and not only me but a lot of people around me (friends, relatives, colleagues) have watched the missteps of Walmart here with amazement. What did they really think they were doing? I’ve read they initially put someone not speaking a single word German as CEO here. That would perhaps explain why they their business practices seemed so extremly ignorant of German culture that I just cant find a worse example in recent history. The hall of shame from a very German point of view:
1) Grocery baggers. Huh??? Are they for real? Please leave my groceries alone.
2) People greeting you at the door. Not really annoying. But somehow spooky and out-of-place nevertheless.
3) Flirt rules for employees. Unions of course protested. Even worse: There is (unfortunately – like it or not) a large Anti-Americanism here. When consumers heard of these rules they did not buy there *intentionally* effectively boycotting them. Germans have a long tradition to do so when they hear that employees are mistreated or the environment is polluted. They follow even more closely if it’s a US company. They could have really expected this easily.
4) Shop size/location. Wal-Mart wanted to compete as a large hypermarket. Shop sizes were extremely small and cramped. Aisles narrow and somehow dark. In my city the wal-mart is in the immediate town-center. You need to use an underground parking lot and only if you buy for more than 20 EUR you get your parking fee refunded. Complicated.
5) Interior design. Is this common in America? All those symbols and labels with strange words (Big yellow stars, “Rollback”, Red labels, Hand-written signs)? Extremly confusing. Combined with their narrow shops you felt like in a maze of neon star signs. Have they never heard of simple rectangular price tags on white background? Ugh.
6) Restaurants. There used to be nice restaurants in there before. You could have lunch/breakfast before or after shopping. Very nice indeed. When Wal-mart bought these shops they replaced them with a McDonalds store. Huh? McDonalds for breakfast? Not for me that’s for sure.
7) Prices. Perhaps low. Perhaps not. People didnt really care after mistakes 1)-6). And their weekly leaflets in my mailbox were so confusing (compare #5) that I didnt dare to look anyway…
FYI, the link that was referenced in the article to wsj.com is available to subscribers of the wall street journal only. Is there a way when you post links to subscriber only (pay) sites that you might place an indicator next to it ( I would appreciate it – and some other folks may as well). I was really interested in reading the walmart story (exact same one as you did)- but ended up reading another version of it:
http://www.usatoday.com/money/industries/retail/2006-07-28-walmart-germany_x.htm
Thanks,
Chuck
ICB LTD GHANA
From Desk Of Mr Daniel Mensah.
The manager of bill and exchange
at the foreign remittance department
in the International Commercial Bank Ltd Ghana(ICB)
REMITTANCE OF (US$30. Million) CONFIDENTIAL IS THE CASE
.
Dear Friend,
I am the manager of bill and exchange at the foreign remittance department in the ICB LTD GHANA. In my department we discovered an abandoned sum of US$30m dollars (THIRTY MILLION US DOLLARS) in an account that belongs to one of our foreign customer (MR. ANDREAS SCHRANNER from Munich, Germany) who died along with his entire family on (Monday 31st July 2000) in a plane crash.
FOR MORE INFORMATION VISIT THIS SITEBELOW.
http://news.bbc.co.uk/1/hi/world/europe/859479.stm
Since we got information about his death, we have been expecting his next of kin to come over and claim his money because we cannot release it unless some body applies for it as next of kin or relation to the deceased as indicated in our banking guidline and laws but unfortunately we learnt that all his supposed next of kin or relation died alongside with him at the plane crash leaving nobody behind for the claim.
It is therefore upon this discovery that I now decided to make this business proposal to you and release the money to you as the next of kin or relation to the deceased for safety and subsequent disbursement since nobody is coming for it and we don’t want this money to go into the bank treasury as unclaimed bill.
The banking law and guideline here stipulates that if such money remained unclaimed after nine years, the money will be transferred into the bank treasury as unclaimed fund. The request of foreigner as next of kin in this business is occasioned by the fact that the customer was a foreigner and no body will stand as a beneficiary from our department to as his next of kin except a foreigner.
I agree that 40% of this money will be for you as a respect to the provision of a foreign account , 10% will be set aside for expenses incurred during the business and 50% would be for me Thereafter, I will visit your country for disbursement according to the percentage indicated Therefore, to enable the immediate transfer of this fund to you , you must apply first to the bank as relation or next of kin of the deceased indicating your bank name, your bank account number, your private telephone and fax number for easy and effective communication and location where in the money will be remitted.
Upon receipt of your reply, I will send to you by fax or email the text of the application .I will not fail to bring to your notice that this transaction is hitch-free and you should not entertain any atom of fear as all required arrangements have been made for the transfer.
You should contact me immediately as soon as you receive this letter. Trusting to hear from you immediately.
Yours Faithfully,
Mr.Daniel Mensah
BILL AND EXCHANGE MANAGER International Commercial Bank Ltd Ghana(ICB)
NB:
Please if you are not interested kindly delete this mail out from your in-box
ICB LTD GHANA
From Desk Of Mr Daniel Mensah.
The manager of bill and exchange
at the foreign remittance department
in the International Commercial Bank Ltd Ghana(ICB)
REMITTANCE OF (US$30. Million) CONFIDENTIAL IS THE CASE
.
Dear Friend,
I am the manager of bill and exchange at the foreign remittance department in the ICB LTD GHANA. In my department we discovered an abandoned sum of US$30m dollars (THIRTY MILLION US DOLLARS) in an account that belongs to one of our foreign customer (MR. ANDREAS SCHRANNER from Munich, Germany) who died along with his entire family on (Monday 31st July 2000) in a plane crash.
FOR MORE INFORMATION VISIT THIS SITEBELOW.
http://news.bbc.co.uk/1/hi/world/europe/859479.stm
Since we got information about his death, we have been expecting his next of kin to come over and claim his money because we cannot release it unless some body applies for it as next of kin or relation to the deceased as indicated in our banking guidline and laws but unfortunately we learnt that all his supposed next of kin or relation died alongside with him at the plane crash leaving nobody behind for the claim.
It is therefore upon this discovery that I now decided to make this business proposal to you and release the money to you as the next of kin or relation to the deceased for safety and subsequent disbursement since nobody is coming for it and we don’t want this money to go into the bank treasury as unclaimed bill.
The banking law and guideline here stipulates that if such money remained unclaimed after nine years, the money will be transferred into the bank treasury as unclaimed fund. The request of foreigner as next of kin in this business is occasioned by the fact that the customer was a foreigner and no body will stand as a beneficiary from our department to as his next of kin except a foreigner.
I agree that 40% of this money will be for you as a respect to the provision of a foreign account , 10% will be set aside for expenses incurred during the business and 50% would be for me Thereafter, I will visit your country for disbursement according to the percentage indicated Therefore, to enable the immediate transfer of this fund to you , you must apply first to the bank as relation or next of kin of the deceased indicating your bank name, your bank account number, your private telephone and fax number for easy and effective communication and location where in the money will be remitted.
Upon receipt of your reply, I will send to you by fax or email the text of the application .I will not fail to bring to your notice that this transaction is hitch-free and you should not entertain any atom of fear as all required arrangements have been made for the transfer.
You should contact me immediately as soon as you receive this letter. Trusting to hear from you immediately.
Yours Faithfully,
Mr.Daniel Mensah
BILL AND EXCHANGE MANAGER International Commercial Bank Ltd Ghana(ICB)
NB:
Please if you are not interested kindly delete this mail out from your in-box