Wal-Mart International Failure

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WIESBADEN, Germany, July 31 — Three days after Wal-Mart Stores announced that it would pull out of Germany, Roland Kögel was wandering through the aisles of a somewhat threadbare Wal-Mart in a strip mall in this western German city. Multimedia {draw:a} Related Retail Chains Scramble to Enter Indian Market (August 2, 2006) ) {draw:a} Chung Sung-Jun/Getty Images In South Korea, Wal-Mart had only 16 stores — a small presence that contributed to its decision in May to sell out to a Korean discount chain. {text:bookmark-start} {text:bookmark-end} “Why are they giving up now?” he asked. “They have good prices and a good variety of products.” Yet Mr. Kögel, 54, confessed that he never bought groceries at Wal-Mart. Food is cheaper at…show more content…
Starting from scratch 14 years ago, Wal-Mart International has grown into a $63 billion business. It is the fastest-growing part of Wal-Mart, with nearly 30 percent sales growth in June, compared with the same month last year. Even subtracting one-time gains from acquisitions, it grew at nearly 12 percent, about double the rate of Wal-Mart’s American stores. Sustaining that pace is critical for Wal-Mart, because high fuel prices have helped sap the buying power of Americans. In June, store traffic in its home market declined. Wal-Mart estimated that its sales in the United States in stores open at least one year would increase only 1 percent to 3 percent in July. Multimedia {draw:a} Related Retail Chains Scramble to Enter Indian Market (August 2, 2006) Wal-Mart Germany, with 85 stores and $2.5 billion in sales, is almost a footnote for a company focused on Asia and Latin America. But the problems it encountered here have echoes elsewhere. For example, it never established comfortable relations with its German labor unions. “They didn’t understand that in Germany, companies and unions are closely connected,” Mr. Poschmann said. “Bentonville didn’t want to have anything to do with unions. They thought we were communists.” Ms. Keck said Wal-Mart did cultivate good relations with the leaders of the works’ council, which

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