How do you transplant an American institution to Europe and make it work?<\/p>\n
It’s not immediately obvious why Wal-Mart recently failed so spectacularly in Germany. German Wal-Marts were usually not located downtown but instead outside of town, which is atypical but not unprecedented for German stores; other outlets have had success in similar locations. “Service with a smile” is a new concept in Germany, but also a spreading business trend, even if the clerks at our local grocery store look pained when they perform their ritual friendliness. Another icon of the American shopping experience, the grocery bagger, didn’t fare as well. “Why is that young man loitering around my food?” the customers would ask. “Tell him to keep his fingers off my groceries!” Germans pay somewhat more than lip service to good labor relation, while Wal-Mart’s labor practices are notorious, but successful stores have had their share of bad press, too. By far the most important factor for consumers, however, is price. Germany has a very competitive market for groceries and consumer items. Even large stores with limitless selection have to offer comparable products at the extremely low price points of the discount specialists like Aldi. (Even with the current crummy exchange rate and a hefty 17% VAT, most groceries are cheaper here than in the US.) In the end, Wal-Mart was outclassed by the competition. The products that Wal-Mart offered German shoppers were not notably better than products available in other stores, and the prices were unremarkable. German shoppers knew Wal-Mart as an American store, but they were disappointed that it didn’t offer much in the way of American products. Wal-Mart offered an alien shopping experience but none of the advantages in price or products that consumers ultimately cared about. (Aldi<\/a>, all hail to its name, has had much more success at exporting the German discount grocery shopping experience to the US.)<\/p>\n