Mr. Giant Reacts: Why Walmart Failed In Germany - Cheddar Examines (REACTION)

Walmart failed in Germany, why did they fail? was it economic, or was it a cultural misunderstanding or was it both. There may be a few reasons why Walmart failed in Germany, this video explores that.

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Big ups for watching the video.

[timglennon]

This video is slightly out of date.
Walmart does not own the U.K. Supermarket chain Asda anymore.
Walmart sold Asda in August 2009.

[SKy_the_Thunder]

8:02 - 8:14
As a German that bit instantly raises a red flag. It's incredibly tone deaf to require stuff like that in a nation that vividly remembers similar practices from the two absolutist regimes it had finally rid itself of... Same for the "reporting each other" thing. East Germany had been infamous for that on a national scale, with people being "disappeared" if the wrong person revealed the wrong info to the wrong office - and they thought it would come across well to enforce that stuff not even a decade later?

[teotik]

There is no law that you have to have a certain price as she mentioned.
What you cannot do by law, is reducing your prices below the cost price to get competitors out of the market.

[arnodobler]

As a German i hate this Fake Customer "Service"

[JimbalayaJones]

Walmart came here thinking that the "American way" is the only right way...
But the laws in Germany (and many other countries) protect employees. That kind of "modern slavery" doesn't work here.

[emiliajojo]

Every company in Germany with over two thousand employees is required to have fifty percent union representatives on their board of administration, which means employees have a say in every strategic decision the company makes

[fraso]

Walmart didn't wanted to fit into Germany and they didn't obey the rules. Walmart does want to do everything like in the USA. But here by law unions are a big thing with many rights. Within the last 20 years they blundered a lot, because they did politricking. But german law guarantees a lot of stuff, so there is a back up for the rights of workers. Walmart even tried to act against the german constitution. At first the people were curious, but after all of this was revealed, nobody wanted to buy at their stores. At least, that's, how I experienced it.

[Humpelstilzchen]

Company store...
Some people say a man is made outta mud
A poor man's made outta muscle and blood
Muscle and blood and skin and bones
A mind that's a-weak and a back that's strong

You load 16 tons, what do you get?
Another day older and deeper in debt
St. Peter, don't you call me 'cause I can't go
I owe my soul to the company store

I was born one mornin' when the sun didn't shine
I picked up my shovel and I walked to the mine
I loaded 16 tons of number nine coal
And the straw boss said, "Well, a-bless my soul"

You load 16 tons, what do you get?
Another day older and deeper in debt
St. Peter, don't you call me 'cause I can't go
I owe my soul to the company store

I was born one mornin', it was drizzlin' rain
Fightin' and trouble are my middle name
I was raised in the canebrake by an ol' mama lion
Can't no high toned woman make me walk the line

You load 16 tons, what do you get?
Another day older and deeper in debt
St. Peter, don't you call me 'cause I can't go
I owe my soul to the company store

If you see me comin', better step aside
A lotta men didn't, a lotta men died
One fist of iron, the other of steel
If the right one don't get you
Then the left one will

You load 16 tons, what do you get?
Another day older and deeper in debt
St. Peter, don't you call me 'cause I can't go
I owe my soul to the company store

[karstenbursak]

Sadly Cheddars clip contains some inaccuracies and leaves out some important points why Walmart failed in Germany and as a consequence in all EU member countries, incl. the UK as they sold ASDA in 2020 (yes it's an older clip)

- poor market research in advance

- poorly chosen locations of their stores, as most of them where hardly accessible by public transport or foot.
Walmart chose to place their stores the "american way", meaning in solely commercial areas (bc they where used to american laws that strictly separate commercial from residential areas, unlike Germany where commercial and residential areas are more mixed), most of them where hardly accessible by public transport or foot, unlike the German stores, who tend to be closer or directly in residential areas, easily accessible without a car.
For example, I live in Berlin, an there are 11 (!) grocery stores of 9 different brands within a 10 minute walking distance. I also lived in smaller towns and rural areas, but I never had to use a car, as there where always at least 2 grocery stores within walking distance.

- communication problems, as the "German headquarter" was based in the UK, without any german employees in the middle and upper management, and mostly US and UK managers that barely spoke german, if any at all.

- You can be sure, that Walmarts "ethics code" that "encouraged" the workers to report coworkers for breaking the rules, was not taken well, in a country where 2 authoritarian regimes (first the Nazis and later the east german communists) actively encouraged and forced it's citizens to spy, snitch and denounce their neighbors, coworkers and even their own families.

also: the statement that in Germany small retailers are allowed to sell at lower prices than big ones by law is incorrect and misleading.
The relevant law stipulates that the goods must not be resold to the end customer below the retailer's purchase price.
So if the retailer buys a gallon of milk from the dairy farm for $1, he is not allowed to sell it to the end customer for $0.99. But this "predatory pricing" is exactly what Walmart was doing, and is widely known for. To sell their goods at a calculated loss to force competitors out of business.

Also: the shown timetable of the opening hours is just made up BS ...
the usual retail hours at the time where monday to saturday from 8am to 7 pm
it changed a bit to mostly 6 or 7 am to 9 or 10 pm currently, but sunday is still closed

"It has become increasingly clear that in Germany's business environment it would be difficult for us to obtain the scale and results we desire."
a.k.a.
"We cannot be successful in a market where we cannot bend and break the existing rules and laws to our advantage and our preferences."

Walmart also faced similar problems in other countries, like India, Brazil or Japan.

a small fun fact at the end:
The Aldi-Brothers, Karl and Theo Albrecht already had more than 300 stores running in Germany, when Sam Walton opened his first Walmart in 1962.

[tiefseehase]

I live in Germany and I actually was one time in a WalMart. We had one some kilometers away from where I lived and I was curios, so I went to see.
It was, for me at least, an awful experience. It wasnt the products or the prices but rather the whole awkward atmosphere there. You could see and feel the discomfort of the employees, having to act fake-friendly while not feeling that way.
It was later that I found out how the company created a sect-like environment. But I didnt cared anymore, I wouldnt have gone to WalMart again anyways.

[farkstein]

Sold my soul to the company store...

Good song :)

[worldhello]

@9:06 It is more than just perception. That chick can't be that dumb to think it is not fake and a cashier who works under one of the worst conditions all of the sudden is thrilled and happy to see a customer. It is one thing to avoid a defamation lawsuit but another to insult the intelligence of the viewership, what this chick did.

[DMSG]

As a German, I remember entering one of their stores when it was new. The "greeter" was a role I've never seen before and like depicted in the video, I found that extremely creepy. As I was looking through the aisles, 'cause I was curious what they have to offer, different employees in regular intervals asked me if they could be of help to me... in a grocery store! No, thank you, go away! If I am looking for a particular item and can't find it, I'm coming to you to ask you. Since I was asked that question multiple times and the idea of "greeters" is creepy, I never went back. I never made it to the check-out, because I didn't buy anything. Also, of course I was talking to my friends about the experience afterwards. Not in particular, but stuff like this just comes up in conversation. So I can't imagine they bought anything at that place either.

[fraso]

And regarding communism: Within Germany health care and rights for workers were mostly introduced by conservative and christian politicians, while the left ones were politricking. The next time, they say, that health care is communism, you can ask, if Bismarck and Adenauer were communists. (Adenauer was the first chancellor after WW 2, decided to follow the western way and lead Germany into the NATO.)

[riccardocoletta]

They failed also in Italy. First they were told from government about our labor laws (padi vacations, paid sick days, paid parental leave, working hours cap, unions organizations and so on). Second they were told by major unioins that Waltmart will be kept under strict observetion because of their bad reputation about exploiting workers. Walmart left the project without even starting it.
They also closed her last Walmart shop and partecipations in UK in 2021. There isn't any Walmart shop in Europe anymore
If you look for slaves instead of workers, you can go back in your country, where workers are used to be treated as animals
We won't miss you Walmart, goodbye

[helloweener]

No, Germany didn't need Walmart at the time.
Walmart bought 95 stores.
There was a reason why they were sold in the first place.
To much store, so some had to die.

[ianetams]

Get any german company to you're island.and 3 people from that company- at least.i can promise, workers Union is there as well and is already planning

[tschaytschay]

Thank you :) It was interesting to hear your insight. And with every video I get the feeling that you don't belong in the US. 🙈 Not that anything is perfect anywhere.

[helloweener]

Unions are protected by the constitution in Germany.
Article 9 of the Grundgesetz (Basic law = constitution)
(1) All Germans have the right to found clubs and associations
(3) The right to form associations to protect and promote working and economic conditions is guaranteed for everyone and for all professions. Agreements that try to limit or hinder this right are void, and measures aimed at this are illegal. Measures pursuant to Articles 12a, 35 paras. 2 and 3, Article 87a para. 4 and Article 91 may not be directed against labor disputes which are conducted to protect and promote the working and economic conditions of associations within the meaning of sentence 1.

You are allowed to form a union and the company is not allowed to hinder you from doing so.
And there is a clause in the constitution that protects all artciles from 1 -to- and 20 of being changed.
So even if a company would buy themself into the gouverment, they could not change article 9, it would be anti constitutionell and illegal.
So you can't bust unions in Germany.

[kosarkosar]

In the EU probably in all countries, these are not allowed to reduce wages if the norm is not made or take hours if you made them. In Germany, they are also very protective of domestic trade, through politics and trade unions. In the eastern part of Europe, the Germans have mostly taken over banking and almost all the shops are owned by them. In these German-owned shops, you can hardly find domestic products because German unions do not allow owners to sell foreign products and thus encourage the expansion of German industry. So the poorer countries, when they sold these stores, lost the opportunity to develop domestic products faster, because if you can’t sell at home, it’s even harder abroad. In addition, small countries have a small market, which further hampers their development, because only quantity can make a product cheaper and more competitive with others.