Wal-Mart finds its formula doesn't fit every culture

Quiz

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Wal-Mart is probably the most successful US-based general goods retailer in the world. Yet, after nearly a decade of trying, it pulled out of Germany. It realised that its formula for success - low prices and a wide choice of goods - did not work in markets with their own discount chains and shoppers with different habits. 'It is a good, important lesson,' says Beth Keck, a spokeswoman
for Wal-Mart. Among other things, Wal-Mart has learned to deal with different corporate cultures with more sensitivity. In Germany, it stopped requiring sales clerks to smile at customers, because some male shoppers interpreted this as flirting. It also stopped requiring staff members to sing the Wal-Mart chant every morning. 'People found these things strange. Germans just don't behave that way,' says Hans-Martin Porschmann, the secretary of the Verdi union, which represents 5,000 Wal-Mart employees. In addition, Wal-Mart 'didn't want to have anything to do with unions,' he says. 'They didn't understand that in Germany, companies and unions are closely connected.'
Wal-Mart's German experience also taught it to use local management. The company initially installed American executives, who had little feel for what German consumers wanted. 'They tried to sell packaged meat, when Germans like to buy meat from the butcher,' says Mr Porschmann. A customer, Roland Kogel, 54, says he never bought groceries at Wal-Mart because food is cheaper at German discount chains. He also did not visit the store often because it was on the edge of town and he does not own a car. Finally, Wal-Mart also learned to care less whether its foreign 55 stores carry the name derived from its founder, Sam Walton, as the German Wal-Marts did. Seventy per cent of Wal-Mart's international sales come from outlets with names like Asda in Britain, Seiyu in Japan or Bompreco in Brazil.