AH Challenge - Walmart in Europe

Walmart tried to get into Germany, but our evil socialist labour laws (read: Labour Laws that actually protect the worker) made them leave after they realized that some of their company policies are against the law.
 
trekchu,
What labor laws did they have the most trouble with?

Minimum wage?
Health insurance?
Vacation time?
Maternity leave?
 
but except for in England I see little

Boy, just England?! That's funny!

http://en.wikipedia.org/wiki/Asda

There was me thinking there's an ASDA down the road, ha ha. Do pardon me.

Gah. That opening post seems rather ignorant and fueled by silly clichees about Europe

Like the United Kingdom is made up of one Kingdom called England.

http://retailindustry.about.com/od/famousretailers/a/retailercountry.htm said:
Wal-Mart is still, by far, the largest retailer in the world. France’s Carrefour is still #2. Germany’s Metro AG overtook the United Kingdom’s Tesco chain and claimed the #3 position on the list.

http://retailindustry.about.com/od/famousretailers/a/retailercountry_3.htm said:
United Kingdom
Top Global Retail Ranking #4 - Tesco
Convenience/Forecourt Store, Department Store, Discount Department Store, Hypermarket/Supercenter/Superstore, Supermarket

Go Tesco! http://uncyclopedia.wikia.com/wiki/Tesco
 
From what I've read a big part of the Walmart model in the US is based on dirt cheap fuel leading to dirt cheap trasportation and distribution. Fuel is expensive in Europe which I imagine throws the cheap distribition part of the Walmart model out of kilter. the European chains have grown up in this environment and probably have methods to mitigate the high fuel costs on distribution.

Interesting thought, but in most parts of Europe, the population density is just so high that you can dot the map with more markets and still reach enough people for your stores to be viable. I would dare to say that this is more decisive.

To underline my point to an extreme- I haven't seen a Walmart in Manhattan either.

Also, at least since 2008, American fuel isn't that ridiculously cheap in comparison more either.

2.74$ for a gallon (today's average as to gasbuddy.com) => 0.71$ for a liter, i.e. 0.85€ per liter (taking a ratio of 1$=1.20€ as a fair value, the actual $/€-cross is quite overrated).

In Germany, you pay about 1.40€ per liter, but different taxation leads to different prices. Austrians, for example, pay less than 1.20€ per liter, Spanish about 1.13€ (according to ADAC).

Now remembering my first trip to the USA in '99, I paid just 1$ for a gallon in some places whereas I already paid almost 2DM, i.e. 1€ for a liter in Germany.


Another possible issue with Walmarts box stores is that in the US there are 765 cars per 1000 people but Europe seems to be about 500. Slapping a box on the edge of town relies on 3 out of 4 people having a car to get there, but when only 1 in 2 people has a car this model may not be viable.

Again, to a certain degree a viable argument - but does that make such a difference? You can put two people in a car (especially in American ones :rolleyes:).


-----

Personally....in my case (and most people I know agree there), I prefer to drive two minutes to the local "Rewe"-market (which is certainly a lot less than 1000m² large, even small by Rewe-standards). Most days, their offerings are absolutely sufficient. They are picked up within 5-10 minutes.

Maybe once a week there is reason to drive to a hyperstore which is of Walmart-like dimensions, but you have to drive 10-15 minutes to reach one of them (there are three within this range).... and back again. Also, shopping takes considerably longer due to the size of the store - time and again my wife and me are a bit surprised about the fact how much time we spent there despite a rather modest shopping-list and other appointments waiting. (And it is not just all my wife's fault.)
 
I believe in tipping points making things viable, and perhaps Walmarts viability starts at a certain population density, relative fuel price and level of car ownership.

Would a comprehensive state health system make Walmart more or less viable? I would have thought that without the need to pay for expensive private health insurance people would have an easier time living on shitty Walmart wages.
 
I believe in tipping points making things viable, and perhaps Walmarts viability starts at a certain population density, relative fuel price and level of car ownership.

Would a comprehensive state health system make Walmart more or less viable? I would have thought that without the need to pay for expensive private health insurance people would have an easier time living on shitty Walmart wages.

I wonder, now, if a Walmart under a more labor friendly US might be better suited to suceed. Or wether the reverse might happen. Carrefour replacing Walmart in the US - now that would be interesting.
 
I believe in tipping points making things viable, and perhaps Walmarts viability starts at a certain population density, relative fuel price and level of car ownership.

The key is probably not directly population density, but shop-density. You have to be the top competitor for a relatively large crowd to sustain these huge stores. This is more probable in rural areas (noticed where WalMart came from?) once, here comes the second factor, mass individual transport (i.e. cars) is available for the general population. I put the tipping point here quite low: one car per farm....err, household. Pivotal is that the car is available 1:4, 1:3, 1:2, 1:1 is not that important as long as your market position is superior enough. Fuel price is secondary to car ownership. Once people have a car, they'll use it, albeit more carefully (i.e. making more planned visits to Walmart, spending more per visit). If the fuel price is too high for sensible use of the car, sane people will not make the investment.

There are probably very complicated formulas already developed dealing with that.


Would a comprehensive state health system make Walmart more or less viable? I would have thought that without the need to pay for expensive private health insurance people would have an easier time living on shitty Walmart wages.

Nothing comes for free. They would instead pay higher taxes. :p Don't take me serious on this one.
 
I think hypermarkets are fairly rare in the UK (and presumerably certain parts of Europe) due to the premium of space. You don't tend to have large amounts of empty land that can be brought up and allow your vast big-box store. Consequently you tend to have smaller stores that are embedded in towns. That isn't to say supermarkets do not get quite large, or those outside urban settlement do not exist, but in my experience atleast they tend to be smaller than the Wal-Mart behemoths that are the image which they seem to portray.

To put it in some perspective the largest Tesco spans 120,000~ sq ft and the largest Wal-Mart apparently spans some 260,000~ sq ft. The mean area of a Tesco store is 30,000 sq ft wheras for Wal-Mart it is about 100,000 sq ft.
 
I think the original 'post' refered to a time in the UK at least that was perhaps decades out of date.

I live in Cardiff, Wales, UK, it's a city of about 300,000 people - shops:

Wal-mart/ASDA - four stores, two at the north of the city near a motorway, and the other two the south-west.

Sainsbury - two, one in the south-west, and the other the north.

Morrison - two, one in the north, and the other in the south west

Tesco have gone in their business model - multi size:
- two superstores, one in the centre (geographical not 'town centre'), the other the west,
- plus two other superstores that are about two-thirds size of the other two, one in the south-east, and the other the east.
- two Metro stores - the the midst of urban areas (the first Tesco stores in Cardiff),
- since added to, by another smaller level of conveinence store - Tesco Express - at least seven maybe more.

Lidl - maybe five stores.

Aldi - two that I can think of.

So we are well served by a big choice - all fighting for our custom.

Conversly, any business especially in the service industry that cares little about its staff won't last. It may keep tight control and record of staff work activity, but it still needs to encourage them to give the 'best service' to customers (which can be very difficult with some customers).
But then again - I don't work for ASDA!
 
trekchu,
What labor laws did they have the most trouble with?

Minimum wage?
Health insurance?
Vacation time?
Maternity leave?

Minimum wage didn't exist at the time, and health insurance is not decided by the employer. I guess it was Wal-Marts dislike of the union among other things (in Germany any employer with >100 employees has to accept the formation of employee's council).

Among other things, they miscalculated the price and landed in the middle - the "hard discounters" like Aldi and Lidl had longstanding contracts with providers and were able to beat Wal-Mart on price, and Rewe&Co could beat it on quality. Plus, if Germans go shopping they mostly don't care about this "greeter" stuff and bag-packing that Wal-Mart tried to import from USA, and saw them as unnecessray extras that only increase prices.
 
trekchu,
What labor laws did they have the most trouble with?

The "Statement of Ethics" violates german laws.

Aldi and Lidl are established low price supermarket. They tried to beat them in their own game and failed - this includes beeing nasty to your own workforce.
 
Aldi and Lidl are established low price supermarket. They tried to beat them in their own game and failed - this includes beeing nasty to your own workforce.

That is certainly true, though it was easy for the established corporations/media/politicians to point the spotlight on Walmart - the newcomer/outsider/American. How Orwellian especially Lidl is only became a scandal recently.

Being American might also be of importance. Walmart is distuingishable American and Walmart's last years in Germany (they sold their last stores in 2006/07) coincided with the era when the USA image reached a new low over here.

As I just read, Walmart never accounted for figures, but there are estimates that they lost about 3 billion € in Germany during their adventure here.

As the closest Walmart to my home was about 30km away (despite me living in a suburb of the 6-million-Ruhr metropolis), I only visited a German one once. I found that it didn't distuingish itself much from other hypermarkets and didn't even strike me as particularly American in most parts.

Maybe it was too late too little. Should the counterfactual question be at what point of time would Walmart have been able to become a major player in (Western-)Germany?
 
If you count Britain as European (I don't personally) then Wal-Mart has tried to get going here by buying ASDA, one of our bigger supermarkets. It hasn't really taken off, mainly because Tesco is actually better at being an evil megacorporation than Wal-Mart is. They've even invaded the US now under a codename.

Asda_joins_the_me_war_large.jpg



Tesco's front in the United States:

800px-Fresh_%26_Easy_Las_Vegas%n_City_Summerlin.jpg

Which is weird, ASDA is cheaper and has a less scummy reputation than Tesco yet somehow Tesco remains on top.
I've posted it a zillion times before but I love it: http://www.youtube.com/watch?v=0PSyiRXIEyc


The way supermarkets work in Sweden is odd.
There's generally the big, expensive supermarkets- ICA, Co-Op.
Then there's the cheap and smaller ones- Willies, Lidl.
 
By the way, in case this hasn't already been mentioned (I just rapidly skimmed through this thread so I apologize if I missed something), Aldi is expanding into the U.S. There's an Aldi store in Manassas, VA, where I live, just a few blocks away from my condo complex in fact. It's small in comparsion to other U.S. supermarkets (a regional chain called Shoppers has a big store in the next block, and I'd say the Aldi is about half that size), but I'd guess it's about the same size as Aldi stores in Europe. I don't shop there that often but the prices are pretty good.

Also, ISTR that Britain has a Best Buy-style electronics/computer chain (perhaps more akin to the Micro Center chain of "computer department stores" in the U.S.) - I'm basing this statement on somewhat dim memories of ads I saw in Computer Shopper magazine back in the 1990's when it was a honkin' big thing, before online shopping. Am I wrong?
 
By the way (apologies again if somebody already mentioned this), Target is the most direct competition to Wal-Mart in the U.S., with a somewhat more "upmarket" image. In Manassas, Target has two stores, one of them a "Super Target" with supermarket included; Wal-Mart is building a "Super Wal-Mart" but I don't know if it's open yet, the one I'm familiar with is about two blocks away (near the Shopper's and Aldi's that I mentioned in my previous post). Truth in posting: I get my prescriptions at Wal-Mart because of their $4 for 30 days/$10 for 90 days policy for generics.
 
but I'd guess it's about the same size as Aldi stores in Europe.

From what you say that is probably the case.

Aldi stores are comparetively small even for German sizes, also, the range of products is somewhat limited. A US Aldi-store carries only about 1,400 regularly-stocked items, according to their website. This is, however, their formula for economic success. The Albrecht brothers (Aldi = Albrecht discount), two guys now in their late 80s, are vying for the #1 spot of the richest Germans.....for quite a long time now. Like antique "duumvirn", they have divided the Ruhr district, then Germany, then Europe and apparently by now the world among them and their autonomous half-chains Aldi Nord and Aldi Süd.

I was surprised to find out that Aldi has been present in the USA since 1976. By now, there are more than 1,000 stores in 29 (Eastern) states.
 
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