Friday, July 28, 2006

Wal-mart, as predicted, keeps on making mistakes

Today it was announced that Wal-Mart is pulling out of Germany, as it recently has in Korea. It loses money in Japan, is losing share in the Uk, and is half Carrefour's revenue in China, with much the same number of stores. Success in global retailing is very difficult, other than fast-food. Yet, Wal-Mart is simply floundering overseas in much the same way as it is in the USA. Moving upscale in clothing, adding organic food, building a huge Marketing department, where once there was none. These all address symptoms, and are a sign of the loss of the clear vision which built Wal-Mart. Perhaps it had become less relevant to new customers, but Wal-Mart is in danger of moving away from its old ones. Its UK rival, Tesco, went through much the same change, from a "pile it high, watch it fly," mentality to a new model of customer intimacy. It will be interesting to see how it succeeds in the US next year.

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