In this article, we will see Why did Walmart fail in Germany?
Current status of Walmart in the world
- Walmart, which was also previously called Wal-Mart stores, is considered an American multinational company that operates a bunch of supermarkets. The headquarters is located in Bentonville, United States.
- This company was initially founded by Sam Walton in the city of Rogers in 1962 and was a part of the Delaware General Corporation law of 1969.
- As per accounts in 2021, Walmart has successfully started and is running about 10,566 stores and clubs. These stores are located in approximately 24 countries all over the world.
- Walmart to this date, even though it has faced ups and downs, is still popular.
- Walmart is most famously known as a Flipkart in India. Walmart is considered the world’s largest company as per the revenue earned. The revenue of this company exceeds 548.743 billion US dollars.
- This revenue number beats its next competitor by literally five times.
- This company is run and controlled by the Walton family hence this company can be also called a family-owned business.
History of Walmart
- In 2009, Walmart was considered the largest grocery retailer’s store in the United States, and 65% of the revenue collected and sales were believed to have come from the US operations.
- The New York stock exchange is the American stock exchange of Manhattan in New York City.
- Walmart company is also regarded as the largest privately employed company in the world with approximately 2.2 million employees.
- Later in 1989, it became the largest company in terms of revenue. Even though it was initially started and run only in the south and the lower Midwest, but soon after its popularity and its reach to the people, by 1990 the stores opened all over the world. The divisions of this company include Walmart US, Walmart International, Sam’s Club, and Global eCommerce.
- The Walmart company has changed its name quite several times. Initially, its name was the Walmart discount City from 1962 to 1969. It was later called Walmart inc in the years from 1969 to 1970. Then finally its name changed to Walmart stores inc.
Being a big company and running several Chains of departmental as well as retail stores all over the world the company was never short of facing the competitors in North America.
Some of Walmart’s competitors include Kmart, Kroger, Target, Teeter, etc. Hudson Bay and Sorways are considered their major competitors in Canada. This company has also faced severe competition in foreign markets and trade.
Difficult times for Walmart
- Walmart is famous all over the world and considered as one of the best department and retail stores. The company itself was never short of problems since Walmart has a large labor force. It had to face a lot of lawsuits and issues in the workforce. The workers had put forth lawsuits involving low wages and poor working conditions.
- In 2019, Walmart introduced several benefits for high school students working there or who want to work there. This included flexible work schedules since most of the students had to balance both their studies and job.
- Walmart had to face several other lawsuits in court. In 2007, a gender discrimination case was filed. The lawsuit stated that the female employees in the company were discriminated against and were not provided with equal pay and promotions when compared to men.
This country is considered the second most populated country in Europe after Russia. Germany has the largest economy all over Europe and also is considered to have the fourth-largest economy by the nominal GDP all over the world. In the Industrial and Technological sector, it is said to have the third-largest exporter and import business of goods. This country is very high on the HDI or the Human Development Index in matters of security, healthcare, environment, and education. Germany also has the third greatest number of world heritage sites.
Why did Walmart fail in Germany?
Germany is the second-most populous country after Russia in Europe and also an economically developed country. Walmart could have got huge revenue profit if it could have been able to run successfully there. But due to several reasons, Walmart could not be successfully built in Germany. Some of the reasons are the following-
1. The Government of Germany accused Walmart of trying to undercut the local chain of grocery stores as they started selling groceries below cost.
2. Walmart is seldom pointed out for paying low wages to its employees when asked to join Germany’s regional wage bargaining system the company refused. This led to a strike of the workers union.
3. There were 14 other hypermarket chains apart from Walmart which were popular across Germany. Therefore, due to the high competition, Walmart was not able to compete with its competitors.
4:The employees working at Walmart in Germany felt uncomfortable with Walmarts Team Building practices; They also felt that Walmart tried to intrude into their personal life.
5:Services provided by Walmart in Germany were not enough; they didn’t have a focused approach to propagate or sell their products.
Even though Walmart had successful business ventures around the world, it failed to do so in Germany. Most of the reasons for failure, as mentioned above, are related to Walmart’s marketing strategy. Walmart, since that time, has made several changes in its operations, and today it is considered the largest company. If you are someone who lives in Germany and is worried about not having a Walmart in your area, then there is no need to worry. There are several other places where you can shop that are similar to Walmart. As for Walmart’s reopening in Germany, given its past and current situation, the possibility is very slim.