Why Walmart failed in Europe

The US supermarket chain Walmart is the most successful company in the world. But it also has a problem: its concept works particularly well in the United States of America, where it was invented - in Europe, however, a planned expansion failed miserably around 20 years ago. Why? Let's find out.

A film by Matthias Schwarzer

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Sources for the video:

Why Walmart failed in Germany (Spiegel, German language):

Walmart's failure - a chronology (Spiegel, German language):

Walmart business figures in 2004 (Manager Magazin, German language):

Walmart ethics code angers Germans (DW):

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Intro song:
MÆT - Start Again

Music:
Epidemic Sound

#usa #walmart #retail #shopping #food #economy

[MatthiasSchwarzerEnglish]

Thanks for watching! Here's more you might like:

[darkmatter]

I live in the UK. Once, a few American hair salons started popping up. I was walking past one when suddenly, out of the blue, this young girl popped out with a fake smile and a fake script telling me how wonderful they were and if I needed a hair cut.

The unwanted approach, coupled with utter fakery, just creeped me out. It must have creeped everyone else out as well…because they’ve all disappeared.

[alansmith]

May I also suggest that another point of failure for Walmart is that, in comparison, European and UK shopping is much more local, so we don't need to buy in bulk and can manage with smaller fridges. If it's only 10 minutes to your nearest supermarket, we can easily shop multiple times per week.

[vallotubli]

I worked for an USA company that had an affiliate office in Northern Europe.
Once they sent an office inspector from USA to inspect our office. The outcome of their inspection was that the office elevators had no seismic sensors and there was no evacuation shelter in case of a tornado. We were flabbergasted of the level of ignorance explaining to them that we don't have earthquakes nor tornadoes here.
Second continuous struggle was with the hiring quotas where we needed to explain in every hiring process why we didn't hire a black person again. Each time we needed to explain that our country's black population is 0.00001% and we don't even ask peoples race or ethnic background here. We're not racist enough to do that.

[bkkp]

I can't believe they make Walmart employees chant "Walmart....Walmart" before their shift. That's so degrading. You couldn't get away with that dystopian shit in Europe.

[MCK]

Good to see in Europe we have laws protecting employees from this kind of malicious corporations.

[davidmarkwort]

1. we have unions
2. we have minimal pay
3. we have laws against unlawful dismissal
4. we have ALDI, Lidl, Edeka, Rewe, etc.
5. we don’t need it

[tsjeriAu]

Fun fact regarding greeting, when Circle K rebranded the gas stations Statoil used to run in Norway, they tried this whole "unnecessarily fake/friendly greeting" that all employees had to do. Regardless what we were doing at the time, if we were cleaning, restocking, making food, actively dealing with another customer(!), every time a new customer came through the door we were supposed to drop everything and give them a smile and a wave and say "Hello, and welcome to Circle K!".
I saw it for what it was and refused to do it even once, and it took not even a week before head office said to completely drop it because they had received thousands of complaints from both employees and customers.

[MTTT]

Another thing not mentioned in the video or the comments, something that really put a dent into Walmart's strategy in Germany, was that their main way of outcompeting their rivals was outright banned in Germany. In Germany during imperial times in the 19th century, they implemented a law to ban the sale of certain produts below purchasing value. So if the package of flour would have cost the salesman 1 Mark to buy from the mill, he could not sell it for 80 Pfennig, in the hopes that soon he would be the only one selling flour in that city, thus outcompeting everybody else, until he is the only one left, and then suddenly flour would cost 2 Mark. This law was implemented back then to ensure food security for the lower classes, and thus prevent uprisings against the monarchy.

In the US Walmart repedeatly uses this strategy to strip entire towns or even regions bare of local competitors. When they tried to do the same in Germany, they were shocked that this was not possible for them. Apparently Walmart leadership did not check the Germany laws, as they did not do on German union law. (When they learned that other supermarket chains willingly had representatives of the unions on their leaderboards, they saw them as outright communists.) So the courts forced Walmart Germany to raise its prices on basic goods like flour, milk, bread and the likes. So the profit margins of like 7-8 % that Walmart HQ had hoped for never materialized, because European, and especially German supermarket chains, operate on a much smaller profit margin of just 2-3 %.

[Pfuhler]

I'm American but studied abroad in Austria, in a rural town for a long couple months. I was slightly annoyed that I had to go to a specific store (shoe store, electronics store, groceries) to get what I needed instead of getting it all in one store like we do in Walmart in America. But later I realized this is how life should be, each of those stores was local, and they specialized in their craft, i.e shoes/groceries/etc. It shouldn't be one big corporation selling everything as it completely destroyed countless mom and pop shops as we call them here. One company should never rule all.

[juelitran]

love how they ask you to be as friendly as possible, but also if you're too friendly with your coworkers, you can be fired. Wow.

[katiebice]

Walmart was one of the main causes of the demise of small town America. They put in THOUSANDS of stores in the mid-west. Those ln small towns started driving 25 or more miles to save money. Small businesses in the town could not compete and went out of business. Jobs declined. When walmart had snagged all of the business, they SHUT DOWN OVER HALF OF THE STORES. So those rural folk went from driving 5 miles to shop went to 25 then to 100 miles. Towns died, the poor tripled and jobs were few and low paying. And rural America has never recovered.

[FlorianWendelborn]

0:03 it says follow the streetname for 1km, not 300m

[Aesoir]

Walmart also requires a car dependent society, the whole model is about being a “1-stop shopping” experience, this is only possible with individual car ownership. So it’s not surprising that any region that has a pedestrian/cyclist focused social model is an anathema to stores like Walmart.

[Jackpkmn]

American here: you dodged a major bullet bullying Walmart out of your country. It actually doesn't work here, its a giant parasite leeching majorly off government benefits and major employee abuse.

[PersimmonHurmo]

That Americans refuse to accept that other countries have their own culture and want to have everything their way is very American of them.

[arnesahlen]

I'm 🇨🇦 Canadian and wish we had more aggressive protections here against massive corporations and their predatory worker treatment.

[jimmycrackcorn]

I was living and working in Germany when Walmart entered the market. We dealt with them and one of the things that stood out the most was the arrogance and bullying they did with vendors, ignoring existing systems that they deemed insufficient. In addition their heavy handed relationship with the slave vendors also reared it's ugly head. Their demise was always just a question of time.

[ElectariumTunic]

As a European (Swede), those greeters and excessive smiles at the register would feel fake and dishonest.

I would definitely feel uncomfortable shopping there.

As for the motivation exercises, such cult behaviour would be absolute demotivators and demoralising. It's writing on the wall of bad management that focuses on insignificant surface solutions.

[Matusware]

*sees employee smiling and saying welcome *
*heavy breathing in a paperbag *