Why Walmart Failed In Germany?! | Americans React | Loners #81

#walmart #germany #america #reaction

Hello Hello Loners, in this video we look at why Walmart failed in Germany. It was interesting to see such a huge name over here not work out in a place such as Germany. We hope you can leave your opinions and insights about this topic and we also hope you enjoy our reaction. If you do, please don't forget to like and subscribe and jump over to our vlog channel for more content :)

-Timestamps-

0:00 - Intro
1:17 - Reaction
9:48 - Outro

[CaptainFirefred]

It failed the moment they expected a cheery attitude from german employees and predatory pricing is illegal in the EU

[michaelgrabner]

Aldi is German and not Australian ..."Aldi" is the abbreviation for "Albrecht Diskont"..There are actually 2 seperate Aldi companies = Aldi-North + Aldi-South with 2 different looking Logos because the Albrecht brothers who inherited the company from their parents splitted the company entirely in the early 1960ties because they had a huge unsolvable dispute in behalf of the business model...So one brother got the shops in the German South and the other brother got the shops in the German North. During the time both started then to operate internationally. Also here they splitted the regions in the EU foremost into North + South as well meaning only one of those 2 either Aldi North or Aldi South is operating in an European country outside of Germany but not both of of them..while Aldi North is present foremost in Northern continental Europe (but they are also in France+Spain+Portugal) Aldi South is foremost present in Southern continental Europe but Aldi South is also on the British Isles (UK+Ireland) + Australia + China.

But both are also operating in the US of A. ..Aldi South as "Aldi" and Aldi North as "Trader Joe´s"

Pleasure to enlighten you.

[sambuka]

Yes, I think they did not quite understand the cultural differences here in Germany... We usually do not like pushy sales people constantly smiling at customers offering help all the time. I can only speak for myself, but when I go shopping, I don't like to have someone coming up to me, offering help... I also do not like to do smalltalk at the checkout. If I need help, I can still ask someone.
So, I consider the American way of overly friendly behaviour as rude. It's just a cultural difference, not a judgement!

[TheDoctorIWho]

Refering to 4:00: It is not allowed in Germany to sell basic groceries below purchase price. You have to make a (small profit). That protects smaller stores from predetory pricing so a cash monster like WAL MART cannot buy its competitors out of business. You have to be really competitive to offer low prices or you have to rise them.

[sangfroidian]

Walmart equally failed in the UK. They bought Asda in 1999, UK's 2nd largest retailer, Netto and other chains/stores for a cost of well over £7.5bn and eventually gave up when Asda slipped to 3rd position and sold the company for £6.8bn in 2021. I think Walmart is one of those companies that just doesn't understand how to operate outside the US.

[markusmenedetter]

Just to clarify, the German regulator did not make them to increase their prices simply because they were "too low". Walmart sold its products below costs, i.e. making a deliberate loss which they would be able to bear because of the size of the company. Once their competition would have been out of the way, they would have increased the prices above market average.

[baramuth]

what wal-mart and other american companies that have failed here do not consider is that there are serious labor protection laws in germany that must be complied with. Laws for the protection of employees that do not exist in the USA.
Working hours of 24/7 around the clock and then with poorly paid employees is doomed to failure from the outset.

[atorthefightingeagle]

They bombed in the UK too. Walmart couldn't legally exploit their employees like they could in the US.

[gregclark]

Aldi is a German store. The biggest problem that walmart had was with the laws for workers and did not want to pay the minimum wage that is put forth by the government and the unions.

[TheTenguwarrior]

One major reason for Walmarts failure doesn't get mentioned in this video: Germany (like Europe general) has walkable cities.
Walmart purchased mostly huge stores at the edge of a city, with big parking lots. In America It seems to be more common that people go grocery shopping only ones every week or every two weeks, drive with their car to Walmart and make a huge grocery haul. This is rare in Germany. Germans are quite used to go buying grocerys multiple times a week on their way home, by foot or public transport at smaller stores in the inner city for things they are in need of. Add to that the difference in worker protection laws and work culture, plus the competition, no wonder WalMart failed

[Ossey]

There was a Walmart in my hometown back then... I went there once... the greeters and the fake friendliness were so weird, I never went back to that store.

[SuperHero-dqjc]

Wallmart set prices below cost for certain products. That was seen as predatory. I went to a Wallmart outside of Frankfurt when it opened. Within 2 minutes, I remember thinking that it would fail. Wallmart greeters were obviously faking friendliness. They never understood the concept of worker's council, which had the right to be involved in decisions. Lastly, I remember Wallmart's PR that was nothing short of arrogant. They were talking like all competitors would die after Wallmart opened.

[roschanvargonay]

The Aldi employees get paid well, but they also have to work hard for their money. I know that and do not expect smiley happy faces all the time.
What impresses me at our local Aldi is, that on several occasions I saw the store manager wiping the floor after some customer spilled e.g. milk. All the other employees were busy, so he did it himself. That‘s what impresses most Germans, not the commanded smiles. I know it‘s not the same at all stores. It highly depends on the management.

[RustyDust]

In Germany you can't just build ONE huge supermarket outside of town when there already are five or six smaller supermarkets located on the way there. Yeah, they may not have the huge range of different brands for one and the same product type as Walmart. But those other chains are often much cheaper at the same or even better quality.
That's one failure.

But the most important failure was that they couldn't strongarm the competition out of the market. In addition breaking multiple employee protection rights enshrined by law didn't endear them with their employees. When Walmart tried to either drown the local courts in lawyers, or tried to draw out the court cases, thereby bleeding the competition dry, they failed miserably. Because the law in Germany is a civil law system, not a case law system like in the USA. The judges basically slapped them with charges, and a world collapsed for the Walmart lawyers. What, no corruption or grift? No bribery or threats to influence the non-existent juries? No threats of retreating and cutting off the market for their customers worked here because there was a lot of stiff competition used to this market? Darn it... 😂😂😂
When they found out that ANY local branch of any company with at least six employees is mandated to be allowed to have a body called the employees' council/Betriebsrat, their minds burst into flames. This council is made up of employees to mitigate conflicts between employer and employees. These council members are employees who can't be fired just for representing other employees. Their council membership protects them from employer whimsical decisions. They have to commit pretty egregious violations of their job contract to be able to be fired. That's "socialism"... 😂😂😂
The final blow came when they were informed that any publicly traded company in Germany of a size much smaller than Walmart requires a union representative on the board of directors with voting rights. Oh, the horror of Horrors of employee representation. 😂😂😂

That's just a small, non- comprehensive summary what they did wrong.

[albertlay]

Walmart can serve as the example of what not do in Europe. Lesson #1: Europe is not the USA.
The reason why chains like McDonald's are successful (meaning they're still here) is because they have adapted to the laws and customs in each European country (within Europe, countries also differ). They pay decent (=legal) wages and the menu's are adapted to the tastes of the specific country.

[asmodon]

This beeing required to report on rule breaking of co-workers is particularly problematic in Germany. In the 90s the memory of Stasi (East German secret police) and their surveillance methods was still fresh. The terror regime of the Gestapo was also never forgotten, of course. This history is ultimately responsible for Germans strong sense of privacy.

[nettcologne]

Incidentally, Trader Joe's is owned by Aldi (German company).
In Germany there are 4 large supermarket groups: Edeka, REWE, Aldi and Lidl, but there are also far more small or independent supermarkets than in the UK, for example. There are also several farmers' markets in every city. Then there are specific markets for beverages & spirits, electronics, drugstores or hardware stores. Walmart had no chance to keep up anyway.

[teotik]

'Difficult to obtain the results we desire'
Seems the only way for Walmart to be successful is to use hostile practices. What a luck they didn't reintroduce child labour.
In Europe we mostly want a quick check out and not spend our leisure time in the supermarket. But we do take our time when dining out.

[TMTMmmmy]

One thing must be mentioned too. As Walmart made more and more loses, they tried to punish the German producers to sell them the goods at lower prices. But they just stopped selling to Walmart (cause there are enough other German resellers), so more and more products get out of stock at Walmart.

[mrm]

@ 3:30 I think it is a bit misleading what Cheddar says there. She basically claimed that small stores are allowed to offer lower prices compared to big stores. That is not, what the law says. It is just nor allowed to sell at a loss in order to ruin your competition. And AFAIK that law already exists since Bismarcks times in the late 19th century.
I never was at a Walmart here in Germany. Their stores were at remote locations, a long car drive away and I have and had always grocery stores within walking distance, much easier to reach. Also I don't like those super large stores, where it takes an hour just to walk trough. At Netto, Aldi, Lidl I am in and out in 10 or 15 minutes. Maybe 5 minutes longer at Kaufland (if those stores aren't too crowded) and I can find the stuff I want quite fast.
Nevertheless I had the idea to go to Walmart at least once just to see what they have too offer, but my motivation was apparently not great enough before they left again. 🤷‍♂