Wal-Mart leaving Germany
see "Wal-Mart Announces Sale of German Business" (PRNewswire, 7/28/06)
Wal-Mart is selling its 85 stores in Germany after trying for nearly a decade to make a go of it there. This follows its pullout 3 months ago from South Korea.
It is interesting how much trouble, relatively speaking, Wal-Mart is having outside the US. There are probably several factors, of which a couple of the biggest are:
1) Not understanding the local culture. Believe it or not, one thing that was mentioned as a negative to Germans is that Wal-Mart wanted greeters to smile and welcome people to the store in a friendly way. Anyone who has been to Germany would recognize immediately that this sort of pleasant behavior is totally foreign to the dour (and in my mind rather unpleasant) typical German on the street.
2) Locals, supported by their governments, not wanting to buy American and not wanting to buy "Big Box". Several years ago, Wal-Mart was ordered by the German government to raise their prices because they didn't want to see competition with local mom-and-pop stores. Not only does this keep Wal-Mart from capitalizing on its strength, being the low-cost provider, but it shows a reluctance by Germans to buy at Wal-Mart for more than one reason, i.e. being big and being American.
Long story short, Wal-Mart's experience in Germany was doomed from the start. Neither the government nor enough consumers would support the entrance of the world's biggest retailer, particularly since it's American. Having visited Germany several times (while living in Holland), I would have advised Wal-Mart not to waste their time trying to do business there.
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