In Germany it's against the law to sell things cheaper than you bought it because this way big companies could simply kick out smaller businesses by burning money. In Germany and the EU it's simply illegal to do this
Here in Belgium I believe it's normally purchase price + 5%. Because you know, a business has costs and all that. If you want to sell under price you need a good reason. Damaged goods, moving store, etc.
in germany the margin for food is between 0,5-1,5% its very very fought, for other goods even the discounters can have a margin for around 20% you just need to end positive at the end and your whole business cant make loss from it so its fine if some products are alot lower @@Londronable
It depends on the size of the store how cheap you can go. It is a law to avoid exactly what Walmart was trying. That law is also the reason why Aldi Stores are so amall
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 out of arrogance ("What works in the US works everywhere!") - poorly chosen locations of their stores. Walmart chose to place their stores the "american way", meaning in solely commercial areas (they followed american zoning 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 with the intention to force competitors out of business. Simplyfied, 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 Walmart was not the only retailer affected by the court ruling, german retailers Aldi and Lidl where equally affected as they tried similar business tactics. 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
Well said. You might want to add that the hire-and-fire strategy of the US simply doesn't work in Germany. Once an employee becomes a full-time employee beyond the probation period it is a lot more difficult. Next: an employer has absolutely NO rights to curtail the relationship status of employees. At all. Any attempts are strictly illegal. Next: any and all locations of any company with six or more employees have the legal right to form a Betriebsrat, an employee council with a number of employees determined by the law regarding that location that has full legal protection from termination unless a crime is perpetrated by them. Especially when they represent another employee in front of employment courts here in Germany when it comes to safeguarding that employee's rights vs the employer. Walmart attempted to prevent the formation of such employee councils multiple times. Next: the union Verdi demanded their right to represent the employees as they were union for any kind of trade and sales (Groß und Einzelhandel). Thus the Tarifvertrag/ the contracts for minimum wages for employees in such businesses was also applicable to Walmart. If not they had the right at first to call for negotiations, with the ultimate tool being a strike of Walmart. Again, Walmart tried to prevent Verdi from gaining members among their employees. Again, highly illegal. The list of crap Walmart attempted went on and on.
Just because of their locations, I was never in a German Walmart in the first place. I thought about going there, just to see what they have to offer, but driving to a remote location for 30 to 40 minutes (if there is no traffic jam) just for grocer shopping, when there is a groceries shop in 5 minutes walking distance? I guess in the end I was just to lazy ...
I have a childhood friend whose mom worked at Walmart back then here in Germany... and they made so many more mistakes than the few mentioned here. Most of all, they imported the local managers from the US - but those managers apparently did NO RESEARCH about their new country. At my friend's mom's walmart, they threw out Pfand bottles because the manager didn't understand the concept and didn't believe employees when they told him the empty bottles were worth something. And then for some time, another store a town over had pillow cases and picture frames on sale... but these were US sized picture frames & pillow cases. Classic German pillows have a different shape usually (square) and picture frames have different usual sizes (because we use cm, not inches). Nobody bought that stuff because it was completely unusable for us 😂
It happened to me few years ago. I worked for an American automotive company in Europe. In the American headquarters, they figured out that one of our colleagues should be fired. The only problem was that this employee was the head of the union, so according to the applicable laws, the union must also agree to fire this person. The American colleagues were confused and shouted communism. I reacted to this when I said in a telephone conference in this regard, why do workers' rights mean communism to you? Do you think, for example, that Germany is communist? Are the Scandinavian states communist? Etc., etc., etc. And I added that here in Europe we didn't just rename slavery, we actually abolished it.
The video is still depicting the problem in a VERY, uhm, "mild" way. To put it the german way: Walmart came into the german market thinking that they could use the same unregulated, predatory measures as in the US and that they could exploit their employees in the same, almost totalitarian way. They did basically no market research and arrogantly assumed that their "concept" would just work fine. It's the same "issue" that Elon Musk is facing with Tesla ("Wait, we can't treat our employees like crap?") And regarding the cultural aspect: Actually forcing Germans to put on fake smiles (which also made a very creepy, intrusive impression to the customers), perform cult-like chants and group rituals didn't exactly look good in a country that was only 50 years away from the Nazi era and not even 10 years away from the GDR... (And then Walmart said that the Germans were "Communists"... Guys, are you even listening to yourselves? Intrusion into personal life, totalitarian exploitation, mindless group rituals, encouragement of denunciation, forced chanting of slogans - it doesn't get more communist.)
Chanting to create loyalty and spying to enforce compliance is not a communist trait, but a totalitarian/authoritarian one. Communism is an economic ideology.
Look back in history americans always suspect anyone of being a communist even Charlie Chaplin. But look now at the US most of the states are either lead by one or turning slowly into a communistic state. But we see that the world loses quite fast its freedom. When you look at germany all of the laws and governments we had and currently have are socialists (and not in a balance free society sense) and turn this country in a nightmare even for those that cant get enough of pushing their failures onto others.
Heard a story from someone who worked at a german walmart store back when they opened. They had a meeting before the first opening where they went through all the company rules, and basically every other sentence, someone interjected and said: "That rule contradicts german law."
Yeah, ethic codes are normally made by governments in a democratic process, if at all, not by managers... That's why in the US the narrative to keep the market "free", or shall we say unregulated, is the favourite in populists agendas.
Walmart could have made it, but made soo many rookie mistakes, did not do their Marketing homework because of their arrogance. Predetory pricing = selling under the actual cost of the product to gain marketshare. Selling below cost is illegal. At that point Wallmarts actual price could not compete coz their cost structure is higher than existing discount retailers like Aldi or Lidl. It really isnt that hard, know your market = 1. Know your customers. 2. Know your workforce 3. Know the legal environment 4. ADDAPT accordingly Wallmart is succesfull in markets with similar work/business culture to the US, in Europe that would ve been the UK, but even there they have issues. I dont know if they ever tried to enter the French market, but i assure you this would be an even worse fiasco😂. 🤘❤️
A former colleague of mine with whom I worked at a European branch of a Japanese company later worked for an American company in the same industry. He told me "Japanese companies send their people abroad to learn how things are done in the various corners of the world. American companies send their people abroad to tell the various corners of the world how things ought to be done...."
Walmart entered France at the same time as Germany. I was shocked to learn that Walmart still has a few stores in France, when even the French overwhelmingly rejected Walmart as well. I'm assuming where Walmart still has stores, they're doing OK, because unlike Germany, French unions aren't as strong as German unions.
@@davenwin1973 where did you get this info? I checked and Walmart themselves claim to only have had stores in the UK and Germany. They never tried France it seems. I'm just saying what they say themselves, not starting a fight here 😂. In fact currently they have no more presence in Europe at all. Also Unions in France are in fact stronger, BUT in germany the culture is to integrate them into decisionmaking, and sometimes even have them as boardmembers. In France it is more of a confrontational model of employer vs employee, that is why i figured it would be even harder in France as they have a reputation of not taking any crap or they will burn the place down 😂.
@FransVantichelen they did have stores in France. I did not realize that just last year, that they sold off the few stores they had, to Carrefour. The stores they did have, were not near major cities, which might be why most did not know Walmart was there. For the UK , they simply owned for a while, a large stake in ASDA, rather than open actual Walmart stores there. Regardless, Walmart's overall business culture was a recipe for disaster in Europe.
Walmart was successful in Germany by reasonable standards with a 1% profit margin. ALDI aims at a profit margin around 1%, while for Walmart that was not worth their time. They bailed because they are greedy fucks.
Germans have shaped the US to an extent. You can compare it with german stores are three sided blocks and american stores are six-pointed starshaped blocks. The three-sided block can go through a six-pointed starshaped hole. But vice versa? It doesn't fit.
I remember when Walmart took over an Interspar in my region in Germany... after I heart about the chanting thing at th beginning of a shift for the employers and the pressure they put on the employees I bought anything there ever again. Guess I´m a very small part of the reason they failed. 😉
Yeah... that greeting shit so creepy... never even sat a foot close to a Walmart door. Don't effing bother me with some fake friendliness when I do my grocery shopping.
The funny thing is that ALDI, afaik the fastest growing grocery store chain in US, does just keep a lot of it's German attributes, culture and habbits.😂
Yeah, most of those Germanism revolve around common sense. There's an idea! I would bet a fair amount of money that 99% of American Walmart employees just h-a-t-e their employer.
But ALDI has been in the USA since 1976 and has pursued a long-term strategy. Now seems to be the time for Aldi to expand. Lidl has also been in the USA for decades.
@@disndat1000 and I bet 99% of Aldi employees hate their employer as well. That's just the nature of things but then to go ahead and force your employees to do stupid chants is just ridiculous.
@@pashvonderc381 There are two ALDI companies, ALDI Nord and ALDI Süd. In Germany, they have geographically divided the country into North and South. In the US, one is active under the ALDI brand, the other owns Trader Joe's. The split came decades ago when two brothers couldn't agree on whether to sell cigarettes or not. Nowadays, though, they cooperate, especially in procurement. Makes it easier to strongarm suppliers....
Walmart has often expanded successfully in other countries. But in most cases, it did so by buing into a local retailer and only gradually adopting its operations ot align more with Walmart. In Germany, they indeed bought a German chain (called Wertkauf), but basicly only used the facilities and none of the local management and their expertise, because they thought Germany would not be that much different from the UK.. What they totally underestimated was the fierce competition in the retail market in Germany. Walmart thought it had enough buying power to force wholesalers to head to their pricing demands. But compared to ALDI, Lidl or Metro, which have their own wholesale operations, they were but dwarves. And it is not that German law demand that large stores have higher prices than small ones. It is just forbidden to sell under the price for what you got the item wholesale. Additionally, they thought they could contract out of the legal requirement for any company above a certain number of employees to have a worker's council, which does not work. You can't sign away legal rights. Walmart had to allow a worker's council to form, and they had to allow trade union representatives come on premises to support the founding of the worker's council, because it's a legal requirement, not an option. The whole idea of the ethics code was illfated from the very beginning, as an ethics code above what the law requires from an employee is unenforcable in Germany in the first place, and no employee can be compelled to sign one. The company is also not allowed to retailiate against employees who didn't sign the ethics code by excluding them from getting into higher positions or giving them lower pay raises. Additionally, it is not for the employer to determine who their employees are allowed to date. They are employees, not serfs.
Idk If they would fail today, too. I was in a Walmart Store in Wilhelmshaven and the funny thing is I never knew that there is a Walmart in my hometown, too 😂
@@Oma_Wetterwachs They would fail, the same principles and condition apply even today. And if Walmart had a 1% profit margin they actually were on par with ALDI & co, because that is about what the local chains expect. So if Walmart cannot accept a "low" profit margin and wants to milk their customers... go f yourself @ Walmart^^
In 2021 in UK, Walmart sold Asda (for no change in value since 1999) as it was slipping in the supermarket wars, unable to compete with British and German supermarkets for market share/profitability and after the merger of Sainsbury and Asda was blocked by the UK competition regulator.
an americans should state why he likes ie ALDI. then he knows the reason why wal-mart failed. for me it was shopping should last 15 minutes and not half of the day.^^
@@Koen030NL Not exactly. The automotive market is very different. Also Tesla does not come in as a superior power as a car manufacturer in Germany. But they surely struggle with similar cultural problems, yet Tesla actually hires local managers compared to Walmart, and at least tries to adapt. And since cars are not essential goods like food stuffs, the margins they can use competitive pricing is much wider. So, i don't know if they will succeed but the conditions and market environment they deal with is certainly a different league. Also not to forget about the political interest of the German government in the product Tesla has to offer, basically the reason why the Giga factory construction was passed through the regulation process so rapidly...
In the UK Walmart introduced a greeter in their ASDA stores - it was hilarious watching everyone carefully avoid him. A company I worked for sold a percentage of ownership to an American company. I went to a manager's meeting with them to discuss ways of improving profitably. They suggested marking employees and sacking the lowest rated, to encourage the others. A bit difficult as we lived on working together and "doing favours". Also it was illegal. A first visit to Washington DC and we visited a Mall in the morning - -we were puzzled by the employees gathered outside doing team building. Our team building consisted of a pint in the pub, workers and managers from different departments, mingling and talking.
When Walmart opened in our country, the cashiers had to stand like in the USA. After hundreds of customers asked if Walmart couldn't even afford chairs, this was changed relatively quickly (at least in my area). And by trying to undercut all the prices of their competitors, they made heavy losses. Many people went shopping there with the offer brochures of all the competitors and saved so much money because they didn't have to drive to everyone else. And Walmart has had to give away things cheaply that they themselves bought at a high price. 🤷🏼♀️
And it was not American people who were flashsmiling at us in German Walmarts. That would have been bearable. It were the same grumpy nice German people who prior to the change worked at interspar (or whatever). And we had to watch them acting weirdly to not loose their job… and we knew that they knew that we knew how painfully awkward this whole situation was. 🫣🥴
Yes very true! When people speak up for themselves together to create change it is always frowned upon by those who want the power. Unions were created to protect the rights of workers and their only failure is if they have poor negotiating skills. You do have to be able to create an environment where both parties can find a solution to a problem. A union is the exact opposite of communistic behaviour. It gives the people a voice. Which I believe is called " democracy"!
Wal-Mart thought they could use the same predatory tactics like in the US, to kill off any Competition in their area and then be the only Store left. But we in Europe had Business practices like that 200 Years ago and learned from them. For over 100 Years the German Market is heavily regulated to ensure the Existance of Local retailers, even more since the start of the Social Market economy. The German Market is highly regulated and anti-Monopolistic.
9:06 "…it's because YOUR business model" - and this is exactly the kind of insight that Walmart has stubbornly refused to show. The glorious idea that you might have to adapt to the country in which you want to be successful has not occurred to the (no doubt well-paid) executives of walmart.
Its rather about the profit expectations. In the report they mention the profit margin of 1% as if that was something totally unacceptable, while ALDI & co aim at around 1% and are totally happy with that. The statement of Walmart why they left was like "the scale and results we desire"... Greedy fucks are they, with no patience on top of that. They could have stayed and aim for the long term, 1% is still a black number...and i would not reject 1% of almost 100 stores in my pocket that's for sure^^
Hello Joel. You could have predicted this from one visit to Germany. Aldi in UK pushes in adverts how much British stuff it has adopted. Having said that, I liked going to Lidl in Spain and UK and seeing stuff from all over Europe at both. I also liked French supermarket Carrefour in Spain, which adopted Spanish stuff, but had an international section too.
Carrefour is also in Belgium. I went to it a number of times while on holiday there visiting my daughters in-laws. Small but lots of fun with all the local products. Friendly staff but not put on. When they said have a good day. They meant it!
What is poorly communicated in that Cheddar clip is that you aren't allowed to sell stuff (usually basics like milk, butter, bread, flour) for less than you bought it as a temporary strategy to kill competition. Being cheaper in general due to low overhead/reduced operating costs (lower staff, inventory, high efficiency) or selling store brands is obviously allowed. And that's exactly what Aldi and LIdl are based on and famous for, and these huge "get everything" stores can't compete with in terms of price.
Love the emotional way you react here! Having been to Germany and being somewhat sensitive to the vibes, you do understand exactly what the point was, here!
@@atlanarkon2005 Nein, Waffen verkaufen ist im Prinzip legal, nur darf kaum einer welche kaufen... 😆 Also, der Verkauf von Waffen ist also grundsätzlich erlaubt aber streng an die Bestimmungen des Besitzes gebunden, dass es für einen Supermarkt überhaupt keinen Sinn ergibt überhaupt daran zu denken^^
German here. I was about 19 years old when I went into Walmart for the first time. I was greeted in a rather "American" - in my eyes exaggerated - standardized manner by a friendly employee. Walmart probably wanted to give me the feeling that I was the best thing that could have happened to them. Wait... What? There was a woman, a real person, a human being and she's supposed to make me feel good about looking for cheap butter? If I want to see an absurd play then I'll go to the theater. That was my first impression of Walmart. Well, that went wrong. Ok, I was young and needed the money so I would have gone there anyways to buy my stuff and you can get used to everything. But then I heard of the dumping prices, the cult-like stuff, their spying, their brutal attempts to fire people and their interference in the private affairs of their employees. Smiling and friendly at the front and manipulative slave driver psychos at the back -everything but honest merchants. And that disgusted me really. There are other Stores. (maybe they are not better, but there is less of this shiny happy swindle in my eyes.) Now, and what does that mean in a highly competitive market, with minimal profit margins, collective agreements, antitrust and competition law, employment and dismissal protection rules etc.? They pay people union rates for greeting me. - other stores don't. That's not my problem. They don't respect neither our rules nor our laws. (Others do). So bye bye ¯\_(ツ)_/¯ (the exaggerated shiny happy U.S-traditional thing is not the problem for me. Some may like it. I do not. But i can bear it and I respect the people who have to do it.)
It´s like with those 2 Germans who opened Döner kepab restaurants in America they knew from the start they have to change the Product (the Döner) for the American market/customer. So they did now they have a whole chain of those Rstaurants and the buisness goes very well.
Döner in Germany is also very different from the original in Turkey - because Turks in Germany looked at what Germans like and don't like to eat, they talked to people, they tried different recipes. And now we have the Alman-style Döner out of Germany that has almost nothing to do with Turkish döner.
In my family it was very clear during this time that we will never enter a walmart. not becauuse its american or the prices .... we don´t support a company which is selling weapons to normal people even they don´t do it in germany. (my fahter said).
I see again and again at American companies that decisions are made at the green table in America. This is not compatible with Germany, where decisions are made locally and employees have a right to have a say. This often leads to these companies having a very difficult time in Germany. The corporate culture of small and medium-sized companies in Germany is different than in the US.
Trade unions work in the following ways. There is a long period of peace where the union supports the entrepreneur. Once the peace period has expired, the union makes a proposal about wage increases or working hours. The company can enter into negotiations and come to an agreement with the union. Or the company can refuse to negotiate, in which case strikes often occur. This then leads to negotiations again and ultimately to a long period of peace. German companies have adapted to this and strikes are mostly avoided. A quick agreement is also an advantage for the unions because they have to pay the wage loss benefits to the members. However, if a company openly opposes the union, the union will try everything to win against the company.
Yes, I experienced something similar working in UK for a Japanese owned company. The cultural differences led to the UK company having a toxic work environment. I only stayed there about a year.
It seems that some Americans cry "communism" at anything connected with human welfare that exists in Europe but is absent in the USA. I once saw a video in which people in the street were asked about universal healthcare - present everywhere in Europe. About half of them - usually of older generation - called it communism.
Meanwhile they are doing such work ethics that Stalin would be proud of them. Work hard, dance as we allow, chant success, always smile, don't complain, don't think about making your work comfortable, don't feel emotional to coworkers, and report any suspicious elements & behaviours. Be obedient, be conformist, be efficient, be happy. Да здравствует Валмарт!
I couldn't agree more with you - Walmart is the embodiment of all that is bad in the US. Aldi has done its homework better, they are taking some share of the market from Walmart in the USA and is the fastest growing grocery chain in the country.
About the pricing: They did not get in trouble because of they where to cheap. They got in trouble because they used a strategy of intentionally sell below cost to drive out competition and create a local monopole. It's not the price, but the strategy that got them into trouble.
I remember how their flirty overdone fakeness gave me some Joker-vibes like in a batman-movie. And the surveillance of the staff? What the workers do out of hours in their private life, that doesn't regard walmart. By the way, at that times in the 90ies, I don't think, that they encouraged observation and snitching to avoid s-harassment. I think, it was about control at all.
4:32 The problem for Walmart was that their usual practice - which is selling at a loss until the comeptitor has to shut down and then raise the prices - is simply illegal in Germany. 6:18 Their "Ethics" code was also in large parts illegal. Their misunderstanding of what unions are and how unions and companies are supposed to work with each other was maybe their biggest problem though.
Contrast this experience with the success of two German supermarket chains in the UK: Lidl and Aldi have become leading contenders in the race to be the most popular supermarket in the country. So, watch out Tesco!!
I still distinctly though a bit distantly remember the time when Walmart tried its hand at the German market ... and failed. I was a kid back when they started and in high school (Gymnasium) when they failed and left. Due to it being my high school time, it became a topic in my school lessons. I especially remember it coming up in 'Economics and politics' of course, but also in religion/ethics class as well as history and German lessons. In economics and politics the topic was initiated by our teacher and we analysed why Walmart was failing and why the newly introduced concept of 'malls' might just work out or not work out as well^^ (we had/have big departement stores as well... but they were/are much better quality than Walmart and had a very different layout. They basically sold 'class' along with the goods😅) In religion/ethics class we talked about the ethics of Walmart practices... for example that cashiers were not allowed to sit at the cash register etc.. But history and German class were a bit different. Here the topic was not brought up by the teachers but by my fellow students. It was the time when such things as the news of those morning chants, the spying policies etc. came out. We were just going over the events leading up to WW2, WW2 itself and the establishment and time of the GDR (DDR) in history class again and in German class we were reading the book 'The Wave' by Morton Rhue. That combination and the news of those strange rituals at Walmart every morning quite honestly scared a few of us and it became a topic of discussion for a few lessons in each class. Basically we were questioning the morality of that and if it was some kind of strange indoctrination and if it could become a bit dangerous like the experiment on which 'The Wave' was based. ... Let's just say... there would be a lot of Americans (especially hardliners) not very happy with the results of those discussions...😅
I'm really happy you have such a decent and realistic view on this. Invading foreign markets and expecting them to adapt to you instead of the other way around, is a whole different level of obnoxious stupid ^^
Like ALDI in the US who totally surprises the local customers with German shopping cart culture... and no checkout service... uhhh 😆 No, invading is not the issue, but being dumb about it certainly is.
@@madrooky1398 I'm not talking about introducing new concepts (which a token for carts f.e. is in my opinion), but not adapting when things clearly are not working. That was my point. Even Aldi in the US sells a lot of things that are more fitting to the American preferences and / or idea about German food. There are a lot of foreign franchises that were brought to Germany, too, which work quite well, but they took taste and customs in consideration (like McDonald's, to name one).
@@cadeeja. I think we actually agree on things its just we use different terms to name it. ALDI and many other German companies have a very different business culture than the typical profit oriented American franchise. The profit margin ALDI and other German grocer chains are aiming for is around 1%, which is what Walmart had actually achieved. Yet it wasn't enough for them to be happy with so they bailed out. All the talking how they could not adapt to the German culture is irrelevant if the very reason for them to leave the market was not survival in the first place. Its in their statement, they realized they could not gain the profits and expansion they were looking for so it was not worth their time. So the main point which is not mentioned at all why they left is the fact that being modest was not in the managements interest. ALDI on the other hand is playing for the long run in every different market they enter. I remember well when they opened their first shops in Switzerland, same basic concept but very different products adjusted to the Swiss market. And that experience actually is reflected in the German stores today, If i am not wrong some of those refrigerated products I saw first in Swiss markets and they were later introduced in Germany as well. So I was a little sarcastic with my comment above, what I am getting at that entering new markets and introducing new things is always possible if you take the time and play it smart. But it is not smart to ship products of your origin country around the whole world, what's the point in that? ALDI always works with local producers, buying in high quantities to be able to have low prices. They could open stores in Japan and do very well without selling a single German product, because Japanese taste in particular is very different than from the west in general. And I can imagine the modest culture of the business would actually resonate well in that particular scenario.
I was only once in a german Walmart ... decades ago! That was kind of creepy for me as a kid! ^^+gg And most of the products they sold where products and brands, I've never heard of! So me had a shopping list, but couldn't find most of my products! So I ended up like buying only some - rather expensive - chocolates! Sadly, too sweet for my taste! :( Never went there again ... :-/
I had the same experience, i was there as i was 5 or 6 and to this day i remember "Der grusel Mann" (The scare man) the greeter at the door who greeted us had this huge fake smile i would expect from a murderer on his face right before he kills his victim, also this scared the crap out of us because greeting customers is not common, and even less to have a singled out employee doing that to everyone all day long. That guy scared my little introverted child self so hard that i could not sleep alone for a few days without having nightmares. I also got some sweets, but it was too sweet too, first and last time i did not eat my sweets. Same with some other stuff we got there, i remember my mother crying as we had to throw way so much groceries because of its mere sugar content.
It seems they stopped all that nonsense later on. I went to one of their stores on a regular basis between 2004 and 2006 and it was just like a normal German grocery store. Bigger than Aldi and with more products, more like Kaufland is now. When Real took over in 2006, the store didn't change much. They just replaced the Walmart brand products with Real brand products. It was an almost seamless transition.
The problem is that many American don’t understand we in Western Europe (and especially Germany, the Netherlands, Belgium and the nordic countries) have a consensus culture. In which the government, employers and employees (through unions) determine labour laws, pensions and wage levels together. Here in the Netherlands (and Belgium) is what is called ‘sociaal overleg’ or social consultation between the social partners. Which are as stated before the government, employees and employers. They come together at least once a year to agree on how they want to operate the next year. On of the important things that is talked about is wage rises, or in some unique cases wage stagnation or reduction. This way everyone can steer the economy the right way. In troubled economic times, it is often determined that wages need to remain te same for some period, or that they can reduce the wages, or more commentary that they can implement ‘arbeidstijdverkorting’ meaning they can reduce the number of hours worked per employee. Allowing the companies to pay out less during hard times, while keeping there employees employed. In most cases the government will pay out the hours not worked during a certain period. This is what happened during covid, when companies where compensated for a certain amount of hours they could not fill in with activity. This meant that as soon as the economy started up again in full swing, companies still had there employees and could easily increase the working hours again. And this also works when the economy is in overdrive and wages are rising fast. The social partners will than try to reduce increases in wages to a certain extent to decrease inflation and maintain proper export levels. So this is a system in which all the parties involved have a stake in how things are run, and where not just the market controls everything. This allows lower lows but also lower highs.
Trying to get rid of local competition with dumping prices might work in the US, but in Germany there is that rule that dumping prices are not allowed. In particular not when it is used to attack (and in the end abolish) competition. That creepy behavior of the people might add to that. I am greeted at my local store as well, even by the people restocking the shelves. But I shop there since 15 years. (And saying "hello" to the cashier is also normal.)
yeah i remember the times, it was quite funny... btw u should watch some follow up videos, cause after that miserable performance by walmart the german discounters started to expand to the us i heard they are pretty successful ^^
Und Aldi (Süd) is opening hundreds of stores every year in the US. And that doesn't include Trader Joe's which is owned by Aldi Nord. Fastest growing grocer in the US. Both Aldis are privately owned and operated on wafer thin profit margin. They don't have any greedy shareholders. They don't save on wages and have a strong emphasis on regional supply chains. I live in Switzerland and Aldi and Lidl have loads of Swiss products on display, each represented with the Swiss flag 🇨🇭. That way they show strong support for local businesses.
@@Lafayette_Ronald_HubbardThat is true, but that is not what I meant. To put it more clear: They print a big flag on the price tags, too. So you really can't miss it. I also saw that with the 🇬🇧.
@@BigWhoopZH It probably does not directly compare. You will surely know that the german flag is used more sparely around here, unless the worldcup is going. What I was thinking about are the posters that I always see with a local farmer boy holding a bucket of potatoes and such. You would not see a germany flag or big "made in germany" signs on the haribo isle, that is for sure.
only 1 light-hearted story from my experience working at Walmart in the Frankfurt Headoffice. I worked in Frankfurt for Spar and later Walmart! It was a nightmare! Only US Manager without a clue of Germany and the worst of the German Manager. One memorable incident involved Mr. Koenig, our IT Director. I sent out an email with detailed instructions and screenshots on how to set up the Walmart email, assuming a smooth process. To my surprise, Mr. Koenig (IT Director), in his attempt to follow the instructions, ended up double-clicking on an image in the email. This action opened the image in Paintbrush, where he unintentionally painted around it. Subsequently, he called me to express his frustration, insisting that the information I had provided was not working. I couldn't help but burst into laughter at the situation!
@@mizzya I have 1000 stories! He also put a view on a database on the AS400 (IBM) was a big machine and clicked on print. over 10.000 pages the IT staff had to call and confirm the print job. He did! Mr Koenig screamed at him! don't ask! Print this shit I want it! He knew it was wrong but at this stage, he only said: Yes Sir! Mr Koenig got 2 Pallets of printouts on the next day in his office! (over 250.000 Pages) Everyone was laughing in the office!
@@mizzya The stupid Walmart People installed a new belt from the US where the pallets get kicked into the trucks on the left and right with big metal panels. Stupid was only that in Germany the Pallet of Gurkens was only wrapped in foil (reduction of packaging) this thing smashed the hell out of the Gurken Glasses! That didn't work! and the way next to the belt was too narrow for the pallets!
@@mizzya In Hamburg the market was able to order, but this stupid Walmart System didn't solve the problem that the stock arrived! So with the new order, they also got the last order, and so on! They could not stop it! they had to rent shipping containers to store the stock! The City of Hamburg gave the market 4 weeks or they had to apply for a building permit! They opened a Container in March and found Silvester Rockets for New Year in it!
GM had to leave Germany too and Ford also stumbled, because they primarily skimmed off short-term profits instead of pursuing a long-term strategy. By the way, Walmart only owns 10% of ASDA in the UK these days.
@@aoilpe Well, Henry Ford was a glowing antisemite and ruled like a dictator. I guess he liked the atmosphere in germany leading to the rise of Hitler, so it was only logical to go to germany during that time. Hitler was a huge fan of Henry Ford and his book "The international jew".
Besides everything that was said in the video and the comment section, Walmart failed in one area - American products. There are many ingredients and foods of "American Cuisine" you couldn't at that time (and sometimes still can't) find easily in Germany like blackeyed peas, red rice, pecan, cajun seasoning, double-rising baking powder, brown sugar, molasses, peanut oil (for a reasonable price), many chocolates and candies. Importing them from the US would have allowed them to stand out against the competition. Instead, they had the same old products as everybody else at a store that was far away and with a weird shopping experience. Why would anybody shop there? I know I didn't.
Walmart operated with a profit margin of 1%, which is totally normal for German chains. They did not fail, they bailed because they are greedy fucks...
This is because those things (especially with chocolate and sweets) are much better in Europe compare Hershey’s whit Lindt and you will never be able to like the taste of hersheys some American chocolate aren’t even allowed to be sold as chocolate. Because it Doesn’t have enough cocoa ( %) to be called chocolate. Same thing for candy allot of American candy’s have other ( Sometimes better) recipes because they can’t use specific ingredients (like red 40 and yellow 5) so they have to use other ingredients. So even if they want to import American stuff they would not be allowed to.
Well, it's called Walmart, not Walsmart. We Germans usually feel an urge to run away when we see a sales person aproaching us (especially in the electronics departments). That's how we are. Besides that, the competition in the bargain price segment is and was huge. It's hard to make a name for your company here with good offers, because it's the norm. People here associate that with Lidl and Aldi already. Yet another reason might be the way we run errands. Big shopping trips for everyday stuff happen, but not too often. We are used to do smaller trips and buy things for a shorter period of time. It is convinient, because you can reach supermarkets easily by bike or even on foot if you want. You can go by without having a car. Walmart was doomed to fail with their concept over here. They would have needed to adapt radically to have any chance on the local market.
But there's also a lot to it that the German wants to feel comfortable in the supermarket, among other things... that wasn't the case at Walmart... it looked like a cold warehouse with only shelves. just bad...Unfortunately, America doesn't work everywhere..
The same would happen to Walmart if they came to Switzerland 🇨🇭. Many CLEVER companies start their businesses here : if the business model succeeds, there’s quite a high chance that the company might make it in Germany 🇩🇪; if not : well , at least the company wouldn’t have thrown billions out of the window …
Aren't the operating costs quite a bit higher in Switzerland, though? I would have imagined they'd just start in one German state, or even city and see how it goes there, before expanding to the rest of the country. Then again, the revenue is probably also higher in Switzerland. Still, I would imagine it taking a higher investment to get started in Switzerland.
There are many stories floating around from Wallmarkt manager not understanding the deposit system and wasted many thousends of euro. Then there is a story that they imported american stuff not noticing that powercable are different and sizes as well. My fav story is the import of gigantic turkey (not fitting into the standard german oven) and wondering why nobody buy them... we no not celebrate like americans here.
They didn't try to adapt their products AT ALL as well! 😄 I heard that they sold the Standart milk and egg containers (which fit into no German fridge) and sold pillow cases, for example that didn't fit any German bed. 😂 How stupid can you get?! I mean, I understand bringing a little bit of another culture to other country's (and even encourage that!), but please do it by bringing authentic spices or something. Even Aldi in the US sells things, that I, as a German, have never seen before, but Americans buy on a daily basis. There ARE just some cultural differences. Aldi in the US adapted to the needs of the locals while simultaneously and suptly bringing their own German local products into play. Easy things like chocolates, bread and cereals.
Very interesting video, Joel. Your reaction was perfect. I could tell that you instantly recognized the single point of failure - cultural understanding. Walmart had a rocky start in Canada, but seems to have adapted. Target came later and utterly failed. It started selling off stores within months of opening. An business failure study of Walmart in Germany and Target in Canada would be interesting. Cheers, John in Canada
heres the thing - german discounters did successfully move into the US. Aldi does pretty well but here is the catch - the US based Aldi shops have almost nothing in common with the german Aldi shops. Products, layout, employment contracts, the union stuff....yeah US Aldi shops are not at all like german ones, thats why they work overseas
I worked at a store were the boss made the experience of having a greater at the door. Our sales went down during that "experience" bc people didn't felt confortable with that.
I was a child when they came and I went to about 1 store out of curiosity, because you see them in American movies and so on, thought the place was creepy and hightailed it out of there 😅
Walmart demanded extra money to bother you as well as their employees. That's a nonstarter. But it was *also* the German business environment, we have extremely low food prizes for a reason. It's a shark tank (and you can argue companies making it here are more likely to make it elsewhere, especially ALDI, who arguably turned it into a shark tank in the first place)
I was working in key accounts at Henkel at the time. And a big problem with Walmart was that they didn't stick to the specifications. We specified the entire arrangement of our products on the shelf and Walmart never adhered to it. Top product at eye level etc.
I was in a Walmart in Germany one (1) time. The whole experience was extremely overwhelming. So many clerks trying to make conversation, everything was loud and huge and colorful, there was music playing and...I remember feeling like even the shopping cart was oversized. My parents in law got lost about half way through, and eventually we just went back out and said "yeah, no, let's go to Aldi". 🤷🏻♀️😅
During the last few years of Walmart being in Germany, I went to one of their stores rather often and it felt 100% like a normal German grocery store. No weird employee antics, no greeters, no fake smiles. It was a pretty okay store comparable to others like Real (now also dead) or Kaufland.
I worked as a cashier for Walmart (in Germany) and the customers were actually extremely annoyed by the program we had to complete. It was drilled into us how we had to greet them, how we had to say goodbye and what sayings we had to say in between, this was also controlled, sometimes openly, sometimes hidden. But behind the scenes the climate was completely different and no friendly at all. The older employees had to be afraid of being bullied out with nasty and underhanded tricks. For example, an employee had goods smuggled into her bag and since we were checked at the exit, she was of course discovered and she was accused of theft and terminated. Without notice! But we all put our hands on the fire for this employee who, after 40 years in retail, has absolutely no need to commit a succinct theft. But it would be very inconvenient to cancel her the “normal” way. Stories like this and similar ones were common at Walmart!
Yeah, it's just mind-boggling. Another reason for their failure which unfortunately also this video glosses over is the breakdown of their supply chain. Due to their underbidding prices, many local suppliers refused to work with them and they had to cart in even basic goods like milk and butter from other countries, raising their own operating cost further.
WalMart failed to "read" the market in germany AND didnt listen to the other companies. Then Walmart got problems with german law and labour unions. And they werent fair to their employees. And the mix of this parts let them mess up. Generally as a company you dont have to listen to other companies, but in some ways it would be better...
I remember Walmart coming to germany. I think this video sums it up pretty well. They came in in a very tough market with a lot of competition and neither understood the culture. Germans are also very sceptical in general, especially with an american epitome culture like Walmart. You know that germans would feel very uncomfortable with friendly cashiers 😂 Also some prices at Walmart were just too high. In general Walmart stores weren’t much different to german competitors like Metros ‘Real’ group, just weirder.
Germans have no problem with actually friendly cashiers, but we despise fake friendliness. And as we all know cashier isn't a great job, to force folks that already don't have it easy to fake smile all day long made it even worse. Another example for the different customer attitude over here: Germans expect to be left alone while shopping. If we have a question we won't be shy and simply ask an employee... meanwhile getting pestered with "can i help you" out of nowhere will just annoy us.
They imported pillow cases from the US to sell in germany.. US pillow cases dont fit on german pillos (different shape) My 8year old nephew wouldve noticed that beforehand
They tryed to open walmart in Italy too. When they were told about our worker rights laws and being contacted by unions that told them they will be looked at very closely because of their bad reputation, the left the project before starting it If you want slaves instead of workers, you can go back to your country and no one will miss you walmart They failed in UK too, closing last shop in 2021 No walmart at all in Europe right now
I heard the loyalty song freaked out the Germans and reminded them of certain events that happened in the 40s. . . The smiling thing reminds me of during the german version of Fraggle Rock they thought the actor was miserable but then found our the smiling thing just isn't their thing (actor said later it was the best job he ever had). That and I've never seen guns sold in Canadian walmarts. Go to a sporting store.
Europe in general has stricter worker laws and most people don't like individuals being too friendly, while they will respond to people that are polite.
I mean Walmart really didn't care. They send over some of their US managers and higher ups to manage a totally different market. Those folks in charge of Walmart in Germany literally had no idea what they did wrong, till it was to late.
AFAIK, Walmart also charged Americans with the task of establishing their stores over here in Germany, which I believe is a major reason why it failed as well. They might have had a better chance, if they actually charged Germans with experience in the field with that particular task. Having worked for a discounter, one other big reason how they can offer such low prices is because they have a limited stock, and the employees don't waste their time approaching customers (most of which just want their peace and quiet trying to shop anyway) or constructing nice displays, they put the stuff out there in their pallettes and boxes so that people can take them away, significantly decreasing "unnecessary" workload. Especially in rural areas like where I live, discounters are often run by a total of three to four people, two for each half of the day (7am to 8pm).
When Walmart first entered the German market, I worked at a hotel very close to Berlin´s (or even Germany´s?) first Walmart. We had a few customers who had been sent over from the US by Walmart to help with the transisition - Walmart employees of German origin who had emigrated to the US a couple of decades earlier and had been long standing Walmart employees. That was a bit better than the only-English-speaking managers that had been sent first. While the store was in West Berlin, a lot of staff was from East Berlin and had learned Russian rather than English in school, so the new "German liasons" helped with communications. But Walmart was not only up against the cultural differences of USA vs. Germany but got also caught up in the cultural differences between East and West Germans, with reunification having happened only a few years prior. Those German-American Walmart employees were West Germans who had been out of the country and away from close contact with the nuances of cultural developments and all of the political and very practical upheaval the reunification brought to Germans´lifes. While there was no language barrier communicating with the staff from East Berlin, they sometimes were just as mystified about their culture as the originally sent Walmart managers. We had some hilarious conversations at the reception desk, trying to puzzle out what had happened during their day at Walmart.
Australian here. I read that Walmart tried to open here, but when they found that they couldn't prevent employees from joining union, they pulled the plug. :-) We dodged a bullet. If they'd tried to get employees to do exercises and yell the company name, they'd have been laughed out of the country. My one visit to a Walmart in the US was an amazing experience (not in a good way). The "greater" was sooooo creepy.
Funfact: German supermarket chains successfully expanded to USA. The discounter Aldi is from what i have heard one of the fastest growing chains in the USA. It is due to lower prices and less waiting time in line(little to no smalltalk)
the walmart and tesla spanking by germans made me so proud for my germans friends, but this behaviour wouldnt be accepted nowhere but US of A🙋🇨🇿na zdravi! Jp based coz he knows, hes seen the difference😂and just add Lidl is the best, also in 🇨🇿 their emploies get paid the most of all retailers here, definitely NOT minimum wage by faaar unlike walmarts modern slaves.. happy to spent my money there
I worked at a Lowes for 3 years. there is a store meeting every morning before opening--had to do the Lowes cheer. ( gimme an L,gimme an O, etc. ) very lame.
The explanation is so KAREN... Wallmart sold some items under the purchaseprise , which did mostly hurt small family buisnesses . And thats why you can be sued if u wanne disturb the marked by selling under price or doing overprice while monopolizing. Tragic thing is the amount of Businesses that closed permanently thanks ro wallmarts Intervention.😢
decades ago, when I saw walmart the first time in my city, I was shocked since I din't know they entered the german market - but I never entered one, couldn't dare
I remember obscurely that Walmart once had entered the German supermarket landscape. I had been interested at first but had my doubts.... Then my mum and I went "shopping" at a newly opened Walmart next to our home. We left with a cart almost empty. What "threw" us off was the organization of the market, or the layout, the prizes that were about the same at Aldi or Lidl with products seemingly less quality. Not to mention the media reports on the "Walmart cheer" which, of course we didn't beliebe😂.
I have not finished it yet. but walmart did not get in trouble for having low prices. but for being a big and rich company and their tactic being to sell their wares at prices so low they lose money selling them. so everybody buys their stuff cause its unbelivably cheap, then after a year or three all the competition would have died out and they could raise prices as much as they want without competition. but that stuff is illegal in germany and companies are not permitted to sell at a loss in order to outdo competition.
It seems to be, ALDI has success in the USA. But the do the same as they do here, small prices small stores and good quality. They do it just through the mass. And as it seems, that the employees of US ALDI are more satisfied with the employer, than the average employee, it seems the small HR-work they do in Germany, where they are not among the most dedicated employers, this HR work is very good in the US-American perspective. The most important error of Walmart was, they took US manager to run the business instead of local managers.
In Germany, and mostly Europe, you are not allowed to sell stuff at a loss. This is considered predatory because the big players always win by default. You HAVE to sell it higher than you bought. How much higher is up to you. This is called "loss leader strategy" and its prohibited.
To be honest Aldi went to the US with the German concept. But Aldi's concept is to operate as cheap as possible with products with a good quality. And I think everyone likes getting cheap products with a good quality.
Hey, I'm from Bremen in Germany and as a child I often shopped at Wal Mart! The interesting thing is that the Wall Mart in Bremen, Germany was also the largest Wall Mart in the world for a short time!
I had previously gone to Wertkauf before here in Bremen for years and found the staff at Wal-Mart a bit too friendly and almost intrusive, as if this had been trained into them. (I have to say that I always like to wander through the supermarkets all alone, carefully choosing the products and wanting to be left alone). When I heard that personal relationships within the workforce were forbidden and that a lot of pressure was being exerted, my sympathy waned considerably, especially since Wertkauf was a really excellent supermarket in comparison and, as you had already noticed, it was huge. The upper floor was later closed down and today only half of the area on the ground floor is still in use.
Thirty years ago a lot of shitty US - MLM - companies wanted to get the peoples money here. One of my friends tried to work at one of them. I've forgotten the name, they sold toys. There was a short meeting every morning where the boss wanted the Star Spangeld Banner to be sung. By the german employees! My friend left the same morning. As far as i know none of that companies made it.
I watched the video from Amway convention in Poland. That was creepy as hell and when they announced the national anthem it was huge WTF!?! (Polish, not US) We don't sing anthem on any given occasion. It must be strictly patriotic event or national holiday not a jamboree of peddlers.
![American reacts to Posts That Prove American's Think That Only They Exist [part 2]](http://i.ytimg.com/vi/KZ_wRzra8yo/mqdefault.jpg)
In Germany it's against the law to sell things cheaper than you bought it because this way big companies could simply kick out smaller businesses by burning money. In Germany and the EU it's simply illegal to do this
Here in Belgium I believe it's normally purchase price + 5%. Because you know, a business has costs and all that.
If you want to sell under price you need a good reason. Damaged goods, moving store, etc.
in germany the margin for food is between 0,5-1,5% its very very fought, for other goods even the discounters can have a margin for around 20%
you just need to end positive at the end and your whole business cant make loss from it so its fine if some products are alot lower @@Londronable
And for good historical reasons.
Some of the worst monopolies were created that way with incredible bad results for the general economy.
anti property rights. Germany is still fascist/nazi
It depends on the size of the store how cheap you can go. It is a law to avoid exactly what Walmart was trying. That law is also the reason why Aldi Stores are so amall
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 out of arrogance ("What works in the US works everywhere!")
- poorly chosen locations of their stores.
Walmart chose to place their stores the "american way", meaning in solely commercial areas (they followed american zoning 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 with the intention to force competitors out of business.
Simplyfied, 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 Walmart was not the only retailer affected by the court ruling, german retailers Aldi and Lidl where equally affected as they tried similar business tactics.
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
Yes.
And that was just brilliantly said 👏👏
thorrow, thanks
Well said.
You might want to add that the hire-and-fire strategy of the US simply doesn't work in Germany. Once an employee becomes a full-time employee beyond the probation period it is a lot more difficult.
Next: an employer has absolutely NO rights to curtail the relationship status of employees. At all. Any attempts are strictly illegal.
Next: any and all locations of any company with six or more employees have the legal right to form a Betriebsrat, an employee council with a number of employees determined by the law regarding that location that has full legal protection from termination unless a crime is perpetrated by them. Especially when they represent another employee in front of employment courts here in Germany when it comes to safeguarding that employee's rights vs the employer. Walmart attempted to prevent the formation of such employee councils multiple times.
Next: the union Verdi demanded their right to represent the employees as they were union for any kind of trade and sales (Groß und Einzelhandel). Thus the Tarifvertrag/ the contracts for minimum wages for employees in such businesses was also applicable to Walmart. If not they had the right at first to call for negotiations, with the ultimate tool being a strike of Walmart. Again, Walmart tried to prevent Verdi from gaining members among their employees. Again, highly illegal.
The list of crap Walmart attempted went on and on.
Just because of their locations, I was never in a German Walmart in the first place. I thought about going there, just to see what they have to offer, but driving to a remote location for 30 to 40 minutes (if there is no traffic jam) just for grocer shopping, when there is a groceries shop in 5 minutes walking distance? I guess in the end I was just to lazy ...
I have a childhood friend whose mom worked at Walmart back then here in Germany... and they made so many more mistakes than the few mentioned here. Most of all, they imported the local managers from the US - but those managers apparently did NO RESEARCH about their new country. At my friend's mom's walmart, they threw out Pfand bottles because the manager didn't understand the concept and didn't believe employees when they told him the empty bottles were worth something. And then for some time, another store a town over had pillow cases and picture frames on sale... but these were US sized picture frames & pillow cases. Classic German pillows have a different shape usually (square) and picture frames have different usual sizes (because we use cm, not inches). Nobody bought that stuff because it was completely unusable for us 😂
Yup standard pillow sizes are something like 40cm x 40cm, or 40cm x 80cm, or 80cm x 80cm here in Germany.
It happened to me few years ago.
I worked for an American automotive company in Europe. In the American headquarters, they figured out that one of our colleagues should be fired. The only problem was that this employee was the head of the union, so according to the applicable laws, the union must also agree to fire this person. The American colleagues were confused and shouted communism. I reacted to this when I said in a telephone conference in this regard, why do workers' rights mean communism to you? Do you think, for example, that Germany is communist? Are the Scandinavian states communist? Etc., etc., etc. And I added that here in Europe we didn't just rename slavery, we actually abolished it.
🤭did they fire you?
I got ahead of them, I quit 🙂
@@Scenario8 👍🏻😊
@@Scenario8 Chad
But the Americans don't like to hear that because, basically, slavery still exists in the USA, you see it every day in so many areas.
The video is still depicting the problem in a VERY, uhm, "mild" way. To put it the german way: Walmart came into the german market thinking that they could use the same unregulated, predatory measures as in the US and that they could exploit their employees in the same, almost totalitarian way. They did basically no market research and arrogantly assumed that their "concept" would just work fine. It's the same "issue" that Elon Musk is facing with Tesla ("Wait, we can't treat our employees like crap?")
And regarding the cultural aspect: Actually forcing Germans to put on fake smiles (which also made a very creepy, intrusive impression to the customers), perform cult-like chants and group rituals didn't exactly look good in a country that was only 50 years away from the Nazi era and not even 10 years away from the GDR... (And then Walmart said that the Germans were "Communists"... Guys, are you even listening to yourselves? Intrusion into personal life, totalitarian exploitation, mindless group rituals, encouragement of denunciation, forced chanting of slogans - it doesn't get more communist.)
💯💯💯💯
Funny how Walmart considered Germans to be communists, while it was them who was forcing their employees to chant and to spy on each other. 😅
Chanting to create loyalty and spying to enforce compliance is not a communist trait, but a totalitarian/authoritarian one.
Communism is an economic ideology.
Excellent point
Look back in history americans always suspect anyone of being a communist even Charlie Chaplin.
But look now at the US most of the states are either lead by one or turning slowly into a communistic state.
But we see that the world loses quite fast its freedom.
When you look at germany all of the laws and governments we had and currently have are socialists (and not in a balance free society sense) and turn this country in a nightmare even for those that cant get enough of pushing their failures onto others.
As the Walmart chant qnd ehtnic code came out to the media older people called wallmart stasimarket
It shows more that communism and fascism are not so different at all ...
Heard a story from someone who worked at a german walmart store back when they opened. They had a meeting before the first opening where they went through all the company rules, and basically every other sentence, someone interjected and said: "That rule contradicts german law."
Yeah, ethic codes are normally made by governments in a democratic process, if at all, not by managers...
That's why in the US the narrative to keep the market "free", or shall we say unregulated, is the favourite in populists agendas.
I wished more Americans would have your mindset and understanding of how the world works.
Walmart could have made it, but made soo many rookie mistakes, did not do their Marketing homework because of their arrogance.
Predetory pricing = selling under the actual cost of the product to gain marketshare. Selling below cost is illegal. At that point Wallmarts actual price could not compete coz their cost structure is higher than existing discount retailers like Aldi or Lidl.
It really isnt that hard, know your market =
1. Know your customers.
2. Know your workforce
3. Know the legal environment
4. ADDAPT accordingly
Wallmart is succesfull in markets with similar work/business culture to the US, in Europe that would ve been the UK, but even there they have issues. I dont know if they ever tried to enter the French market, but i assure you this would be an even worse fiasco😂. 🤘❤️
A former colleague of mine with whom I worked at a European branch of a Japanese company later worked for an American company in the same industry.
He told me "Japanese companies send their people abroad to learn how things are done in the various corners of the world. American companies send their people abroad to tell the various corners of the world how things ought to be done...."
Walmart entered France at the same time as Germany. I was shocked to learn that Walmart still has a few stores in France, when even the French overwhelmingly rejected Walmart as well. I'm assuming where Walmart still has stores, they're doing OK, because unlike Germany, French unions aren't as strong as German unions.
Walmart gave up in the UK. They purchased ASDA supermarkets in 1999. Then sold it to the Issa brothers in 2021.
@@davenwin1973 where did you get this info? I checked and Walmart themselves claim to only have had stores in the UK and Germany. They never tried France it seems. I'm just saying what they say themselves, not starting a fight here 😂. In fact currently they have no more presence in Europe at all.
Also Unions in France are in fact stronger, BUT in germany the culture is to integrate them into decisionmaking, and sometimes even have them as boardmembers. In France it is more of a confrontational model of employer vs employee, that is why i figured it would be even harder in France as they have a reputation of not taking any crap or they will burn the place down 😂.
@FransVantichelen they did have stores in France. I did not realize that just last year, that they sold off the few stores they had, to Carrefour. The stores they did have, were not near major cities, which might be why most did not know Walmart was there. For the UK , they simply owned for a while, a large stake in ASDA, rather than open actual Walmart stores there. Regardless, Walmart's overall business culture was a recipe for disaster in Europe.
What I find highly ironic is that Aldi is very successful in the USA without giving up its German customs and principles.
Walmart was successful in Germany by reasonable standards with a 1% profit margin. ALDI aims at a profit margin around 1%, while for Walmart that was not worth their time.
They bailed because they are greedy fucks.
Well, because the German customs and principles aren't completly moronic, compared to the American ones Walmart tried to bring to Germany.
Germans have shaped the US to an extent.
You can compare it with german stores are three sided blocks and american stores are six-pointed starshaped blocks. The three-sided block can go through a six-pointed starshaped hole. But vice versa? It doesn't fit.
Except that they can pay American pay
That isn't true. I heard the Aldi stores in the USA are much larger than they are in Europe.
I remember when Walmart took over an Interspar in my region in Germany... after I heart about the chanting thing at th beginning of a shift for the employers and the pressure they put on the employees I bought anything there ever again. Guess I´m a very small part of the reason they failed. 😉
Yeah, I had the impression Walmart was a cult. I went to a store to see for myself. It was creepy. Never returned.
You forgot a "never" befor the bought anything^^
Yeah... that greeting shit so creepy... never even sat a foot close to a Walmart door. Don't effing bother me with some fake friendliness when I do my grocery shopping.
The funny thing is that ALDI, afaik the fastest growing grocery store chain in US, does just keep a lot of it's German attributes, culture and habbits.😂
Yeah, most of those Germanism revolve around common sense. There's an idea! I would bet a fair amount of money that 99% of American Walmart employees just h-a-t-e their employer.
But ALDI has been in the USA since 1976 and has pursued a long-term strategy. Now seems to be the time for Aldi to expand.
Lidl has also been in the USA for decades.
@@disndat1000 and I bet 99% of Aldi employees hate their employer as well. That's just the nature of things but then to go ahead and force your employees to do stupid chants is just ridiculous.
@@nettcologne9186 I think that ALDI owns Trader Joe’s..
@@pashvonderc381 There are two ALDI companies, ALDI Nord and ALDI Süd. In Germany, they have geographically divided the country into North and South. In the US, one is active under the ALDI brand, the other owns Trader Joe's. The split came decades ago when two brothers couldn't agree on whether to sell cigarettes or not. Nowadays, though, they cooperate, especially in procurement. Makes it easier to strongarm suppliers....
Walmart has often expanded successfully in other countries. But in most cases, it did so by buing into a local retailer and only gradually adopting its operations ot align more with Walmart. In Germany, they indeed bought a German chain (called Wertkauf), but basicly only used the facilities and none of the local management and their expertise, because they thought Germany would not be that much different from the UK..
What they totally underestimated was the fierce competition in the retail market in Germany. Walmart thought it had enough buying power to force wholesalers to head to their pricing demands. But compared to ALDI, Lidl or Metro, which have their own wholesale operations, they were but dwarves. And it is not that German law demand that large stores have higher prices than small ones. It is just forbidden to sell under the price for what you got the item wholesale.
Additionally, they thought they could contract out of the legal requirement for any company above a certain number of employees to have a worker's council, which does not work. You can't sign away legal rights. Walmart had to allow a worker's council to form, and they had to allow trade union representatives come on premises to support the founding of the worker's council, because it's a legal requirement, not an option.
The whole idea of the ethics code was illfated from the very beginning, as an ethics code above what the law requires from an employee is unenforcable in Germany in the first place, and no employee can be compelled to sign one. The company is also not allowed to retailiate against employees who didn't sign the ethics code by excluding them from getting into higher positions or giving them lower pay raises. Additionally, it is not for the employer to determine who their employees are allowed to date. They are employees, not serfs.
I like your genuine breaking up about Walmart's stupidity and American cultural tone deafness. You get it.
You mean the same American cultural tone deafness that makes them call their president "leader of the free world"?
Idk If they would fail today, too. I was in a Walmart Store in Wilhelmshaven and the funny thing is I never knew that there is a Walmart in my hometown, too 😂
@@Oma_Wetterwachs They would fail, the same principles and condition apply even today. And if Walmart had a 1% profit margin they actually were on par with ALDI & co, because that is about what the local chains expect.
So if Walmart cannot accept a "low" profit margin and wants to milk their customers... go f yourself @ Walmart^^
In 2021 in UK, Walmart sold Asda (for no change in value since 1999) as it was slipping in the supermarket wars, unable to compete with British and German supermarkets for market share/profitability and after the merger of Sainsbury and Asda was blocked by the UK competition regulator.
an americans should state why he likes ie ALDI. then he knows the reason why wal-mart failed. for me it was shopping should last 15 minutes and not half of the day.^^
The can't buy competitior law is good until hearing facebook has done that anyway ...
One of those rare moments when I was proud to be German, when we managed to disgust Walmart out of Germany. 😏
Go Germany.
Isnt a similar thing happening with Tesla at the moment?
@@Koen030NL Not exactly. The automotive market is very different. Also Tesla does not come in as a superior power as a car manufacturer in Germany. But they surely struggle with similar cultural problems, yet Tesla actually hires local managers compared to Walmart, and at least tries to adapt. And since cars are not essential goods like food stuffs, the margins they can use competitive pricing is much wider.
So, i don't know if they will succeed but the conditions and market environment they deal with is certainly a different league. Also not to forget about the political interest of the German government in the product Tesla has to offer, basically the reason why the Giga factory construction was passed through the regulation process so rapidly...
F u Walmart
The best part for me: It wasn't even organised. Everyone just decided independently that they would not spend money at a company like that.
In the UK Walmart introduced a greeter in their ASDA stores - it was hilarious watching everyone carefully avoid him. A company I worked for sold a percentage of ownership to an American company. I went to a manager's meeting with them to discuss ways of improving profitably. They suggested marking employees and sacking the lowest rated, to encourage the others. A bit difficult as we lived on working together and "doing favours". Also it was illegal. A first visit to Washington DC and we visited a Mall in the morning - -we were puzzled by the employees gathered outside doing team building. Our team building consisted of a pint in the pub, workers and managers from different departments, mingling and talking.
When Walmart opened in our country, the cashiers had to stand like in the USA.
After hundreds of customers asked if Walmart couldn't even afford chairs, this was changed relatively quickly (at least in my area).
And by trying to undercut all the prices of their competitors, they made heavy losses.
Many people went shopping there with the offer brochures of all the competitors and saved so much money because they didn't have to drive to everyone else. And Walmart has had to give away things cheaply that they themselves bought at a high price. 🤷🏼♀️
And it was not American people who were flashsmiling at us in German Walmarts. That would have been bearable. It were the same grumpy nice German people who prior to the change worked at interspar (or whatever). And we had to watch them acting weirdly to not loose their job… and we knew that they knew that we knew how painfully awkward this whole situation was. 🫣🥴
Ooh that's cringe worthy lol
Ngl I did cackle when I heard “They thought we were Communists.” That is the way people perceive unions unfortunately.
Yes very true! When people speak up for themselves together to create change it is always frowned upon by those who want the power. Unions were created to protect the rights of workers and their only failure is if they have poor negotiating skills. You do have to be able to create an environment where both parties can find a solution to a problem. A union is the exact opposite of communistic behaviour. It gives the people a voice. Which I believe is called " democracy"!
Wal-Mart thought they could use the same predatory tactics like in the US, to kill off any Competition in their area and then be the only Store left. But we in Europe had Business practices like that 200 Years ago and learned from them. For over 100 Years the German Market is heavily regulated to ensure the Existance of Local retailers, even more since the start of the Social Market economy. The German Market is highly regulated and anti-Monopolistic.
9:06 "…it's because YOUR business model" - and this is exactly the kind of insight that Walmart has stubbornly refused to show. The glorious idea that you might have to adapt to the country in which you want to be successful has not occurred to the (no doubt well-paid) executives of walmart.
Its rather about the profit expectations. In the report they mention the profit margin of 1% as if that was something totally unacceptable, while ALDI & co aim at around 1% and are totally happy with that. The statement of Walmart why they left was like "the scale and results we desire"... Greedy fucks are they, with no patience on top of that. They could have stayed and aim for the long term, 1% is still a black number...and i would not reject 1% of almost 100 stores in my pocket that's for sure^^
Hello Joel. You could have predicted this from one visit to Germany. Aldi in UK pushes in adverts how much British stuff it has adopted. Having said that, I liked going to Lidl in Spain and UK and seeing stuff from all over Europe at both.
I also liked French supermarket Carrefour in Spain, which adopted Spanish stuff, but had an international section too.
Carrefour is also in Belgium. I went to it a number of times while on holiday there visiting my daughters in-laws. Small but lots of fun with all the local products. Friendly staff but not put on. When they said have a good day. They meant it!
What is poorly communicated in that Cheddar clip is that you aren't allowed to sell stuff (usually basics like milk, butter, bread, flour) for less than you bought it as a temporary strategy to kill competition. Being cheaper in general due to low overhead/reduced operating costs (lower staff, inventory, high efficiency) or selling store brands is obviously allowed. And that's exactly what Aldi and LIdl are based on and famous for, and these huge "get everything" stores can't compete with in terms of price.
Love the emotional way you react here! Having been to Germany and being somewhat sensitive to the vibes, you do understand exactly what the point was, here!
Gun's and ammunition were not sold at walmart in germany. There are special stores for that. The same for pharmaceuticals.
Weil es illegal ist.
@@atlanarkon2005 Nein, Waffen verkaufen ist im Prinzip legal, nur darf kaum einer welche kaufen... 😆
Also, der Verkauf von Waffen ist also grundsätzlich erlaubt aber streng an die Bestimmungen des Besitzes gebunden, dass es für einen Supermarkt überhaupt keinen Sinn ergibt überhaupt daran zu denken^^
Instead of blaming on Germany Wal Mart could just learn from the hem😂
German here. I was about 19 years old when I went into Walmart for the first time. I was greeted in a rather "American" - in my eyes exaggerated - standardized manner by a friendly employee. Walmart probably wanted to give me the feeling that I was the best thing that could have happened to them.
Wait... What? There was a woman, a real person, a human being and she's supposed to make me feel good about looking for cheap butter? If I want to see an absurd play then I'll go to the theater.
That was my first impression of Walmart. Well, that went wrong.
Ok, I was young and needed the money so I would have gone there anyways to buy my stuff and you can get used to everything. But then I heard of the dumping prices, the cult-like stuff, their spying, their brutal attempts to fire people and their interference in the private affairs of their employees. Smiling and friendly at the front and manipulative slave driver psychos at the back -everything but honest merchants. And that disgusted me really. There are other Stores. (maybe they are not better, but there is less of this shiny happy swindle in my eyes.)
Now, and what does that mean in a highly competitive market, with minimal profit margins, collective agreements, antitrust and competition law, employment and dismissal protection rules etc.? They pay people union rates for greeting me. - other stores don't. That's not my problem. They don't respect neither our rules nor our laws. (Others do). So bye bye ¯\_(ツ)_/¯
(the exaggerated shiny happy U.S-traditional thing is not the problem for me. Some may like it. I do not. But i can bear it and I respect the people who have to do it.)
It´s like with those 2 Germans who opened Döner kepab restaurants in America they knew from the start they have to change the Product (the Döner) for the American market/customer.
So they did now they have a whole chain of those Rstaurants and the buisness goes very well.
Döner in Germany is also very different from the original in Turkey - because Turks in Germany looked at what Germans like and don't like to eat, they talked to people, they tried different recipes. And now we have the Alman-style Döner out of Germany that has almost nothing to do with Turkish döner.
We don't need Wallmart, we have, Lidl, Aldi, Rewe, netto and Edeka.
and Kaufland, Penny, Norma.......
@@GenBergfruehling yes
@@GenBergfruehling Kaufland is a brand of Lidl and Penny is a brand of Rewe. It's not as many as it looks at first glance.
I know, and netto is a brand of Edeka@@highks496
In my family it was very clear during this time that we will never enter a walmart. not becauuse its american or the prices .... we don´t support a company which is selling weapons to normal people even they don´t do it in germany. (my fahter said).
Technically it is legal in Germany to sell weapons in a supermarket, but most of the people are not allowed to buy them. So why bother... 😄
Plus Wallmart don't have a Tesco Meal Deal equivalent.
I see again and again at American companies that decisions are made at the green table in America. This is not compatible with Germany, where decisions are made locally and employees have a right to have a say. This often leads to these companies having a very difficult time in Germany. The corporate culture of small and medium-sized companies in Germany is different than in the US.
Trade unions work in the following ways. There is a long period of peace where the union supports the entrepreneur. Once the peace period has expired, the union makes a proposal about wage increases or working hours. The company can enter into negotiations and come to an agreement with the union.
Or the company can refuse to negotiate, in which case strikes often occur.
This then leads to negotiations again and ultimately to a long period of peace.
German companies have adapted to this and strikes are mostly avoided. A quick agreement is also an advantage for the unions because they have to pay the wage loss benefits to the members.
However, if a company openly opposes the union, the union will try everything to win against the company.
Yes, I experienced something similar working in UK for a Japanese owned company. The cultural differences led to the UK company having a toxic work environment. I only stayed there about a year.
Not only in Germany, all over the EU (not Europe) is this the case
I just find it funny that ALDI is easily able to establish itself in America with the German model and even displace Walmarkt.
To quote Paris Hilton: “What is Walmart? Do like, they sell wall stuff?”
well its funny, but that you can quote paris hilton is suspicious at least..😂
@@theoteddy9665 Why suspicious? She’s an absolute icon.
@@PokhrajRoy. where?!? to whome??? wtf thats crazy, how can one worship paris hilton??
She said that because she thinks she is above it. I mean its true, she doesent need to buy cheap stuff. She has the money.
Doing jumping jacks while screaming Walmart is insane 🤣🤣
It seems that some Americans cry "communism" at anything connected with human welfare that exists in Europe but is absent in the USA. I once saw a video in which people in the street were asked about universal healthcare - present everywhere in Europe. About half of them - usually of older generation - called it communism.
Americans do the same thing all around the world 🌎.
Meanwhile they are doing such work ethics that Stalin would be proud of them. Work hard, dance as we allow, chant success, always smile, don't complain, don't think about making your work comfortable, don't feel emotional to coworkers, and report any suspicious elements & behaviours. Be obedient, be conformist, be efficient, be happy. Да здравствует Валмарт!
I couldn't agree more with you - Walmart is the embodiment of all that is bad in the US.
Aldi has done its homework better, they are taking some share of the market from Walmart in the USA and is the fastest growing grocery chain in the country.
About the pricing: They did not get in trouble because of they where to cheap. They got in trouble because they used a strategy of intentionally sell below cost to drive out competition and create a local monopole. It's not the price, but the strategy that got them into trouble.
In the Netherlands we had Toys R Us. They failed.
So that's what happened also in Portugal? There used to be but no more
I remember how their flirty overdone fakeness gave me some Joker-vibes like in a batman-movie.
And the surveillance of the staff? What the workers do out of hours in their private life, that doesn't regard walmart. By the way, at that times in the 90ies, I don't think, that they encouraged observation and snitching to avoid s-harassment. I think, it was about control at all.
4:32 The problem for Walmart was that their usual practice - which is selling at a loss until the comeptitor has to shut down and then raise the prices - is simply illegal in Germany.
6:18 Their "Ethics" code was also in large parts illegal.
Their misunderstanding of what unions are and how unions and companies are supposed to work with each other was maybe their biggest problem though.
Contrast this experience with the success of two German supermarket chains in the UK: Lidl and Aldi have become leading contenders in the race to be the most popular supermarket in the country. So, watch out Tesco!!
I still distinctly though a bit distantly remember the time when Walmart tried its hand at the German market ... and failed.
I was a kid back when they started and in high school (Gymnasium) when they failed and left.
Due to it being my high school time, it became a topic in my school lessons. I especially remember it coming up in 'Economics and politics' of course, but also in religion/ethics class as well as history and German lessons.
In economics and politics the topic was initiated by our teacher and we analysed why Walmart was failing and why the newly introduced concept of 'malls' might just work out or not work out as well^^ (we had/have big departement stores as well... but they were/are much better quality than Walmart and had a very different layout. They basically sold 'class' along with the goods😅)
In religion/ethics class we talked about the ethics of Walmart practices... for example that cashiers were not allowed to sit at the cash register etc..
But history and German class were a bit different. Here the topic was not brought up by the teachers but by my fellow students. It was the time when such things as the news of those morning chants, the spying policies etc. came out. We were just going over the events leading up to WW2, WW2 itself and the establishment and time of the GDR (DDR) in history class again and in German class we were reading the book 'The Wave' by Morton Rhue. That combination and the news of those strange rituals at Walmart every morning quite honestly scared a few of us and it became a topic of discussion for a few lessons in each class. Basically we were questioning the morality of that and if it was some kind of strange indoctrination and if it could become a bit dangerous like the experiment on which 'The Wave' was based.
... Let's just say... there would be a lot of Americans (especially hardliners) not very happy with the results of those discussions...😅
You know, that's the way it goes, the market regulates itself….😂
I'm really happy you have such a decent and realistic view on this. Invading foreign markets and expecting them to adapt to you instead of the other way around, is a whole different level of obnoxious stupid ^^
Like ALDI in the US who totally surprises the local customers with German shopping cart culture... and no checkout service... uhhh 😆
No, invading is not the issue, but being dumb about it certainly is.
@@madrooky1398 I'm not talking about introducing new concepts (which a token for carts f.e. is in my opinion), but not adapting when things clearly are not working. That was my point. Even Aldi in the US sells a lot of things that are more fitting to the American preferences and / or idea about German food. There are a lot of foreign franchises that were brought to Germany, too, which work quite well, but they took taste and customs in consideration (like McDonald's, to name one).
@@cadeeja. I think we actually agree on things its just we use different terms to name it. ALDI and many other German companies have a very different business culture than the typical profit oriented American franchise. The profit margin ALDI and other German grocer chains are aiming for is around 1%, which is what Walmart had actually achieved. Yet it wasn't enough for them to be happy with so they bailed out. All the talking how they could not adapt to the German culture is irrelevant if the very reason for them to leave the market was not survival in the first place. Its in their statement, they realized they could not gain the profits and expansion they were looking for so it was not worth their time.
So the main point which is not mentioned at all why they left is the fact that being modest was not in the managements interest.
ALDI on the other hand is playing for the long run in every different market they enter. I remember well when they opened their first shops in Switzerland, same basic concept but very different products adjusted to the Swiss market. And that experience actually is reflected in the German stores today, If i am not wrong some of those refrigerated products I saw first in Swiss markets and they were later introduced in Germany as well.
So I was a little sarcastic with my comment above, what I am getting at that entering new markets and introducing new things is always possible if you take the time and play it smart. But it is not smart to ship products of your origin country around the whole world, what's the point in that? ALDI always works with local producers, buying in high quantities to be able to have low prices. They could open stores in Japan and do very well without selling a single German product, because Japanese taste in particular is very different than from the west in general. And I can imagine the modest culture of the business would actually resonate well in that particular scenario.
I was only once in a german Walmart ... decades ago! That was kind of creepy for me as a kid! ^^+gg
And most of the products they sold where products and brands, I've never heard of! So me had a shopping list, but couldn't find most of my products!
So I ended up like buying only some - rather expensive - chocolates! Sadly, too sweet for my taste! :( Never went there again ... :-/
I had the same experience, i was there as i was 5 or 6 and to this day i remember "Der grusel Mann" (The scare man) the greeter at the door who greeted us had this huge fake smile i would expect from a murderer on his face right before he kills his victim, also this scared the crap out of us because greeting customers is not common, and even less to have a singled out employee doing that to everyone all day long.
That guy scared my little introverted child self so hard that i could not sleep alone for a few days without having nightmares.
I also got some sweets, but it was too sweet too, first and last time i did not eat my sweets.
Same with some other stuff we got there, i remember my mother crying as we had to throw way so much groceries because of its mere sugar content.
It seems they stopped all that nonsense later on. I went to one of their stores on a regular basis between 2004 and 2006 and it was just like a normal German grocery store. Bigger than Aldi and with more products, more like Kaufland is now. When Real took over in 2006, the store didn't change much. They just replaced the Walmart brand products with Real brand products. It was an almost seamless transition.
The problem is that many American don’t understand we in Western Europe (and especially Germany, the Netherlands, Belgium and the nordic countries) have a consensus culture. In which the government, employers and employees (through unions) determine labour laws, pensions and wage levels together.
Here in the Netherlands (and Belgium) is what is called ‘sociaal overleg’ or social consultation between the social partners. Which are as stated before the government, employees and employers. They come together at least once a year to agree on how they want to operate the next year.
On of the important things that is talked about is wage rises, or in some unique cases wage stagnation or reduction. This way everyone can steer the economy the right way. In troubled economic times, it is often determined that wages need to remain te same for some period, or that they can reduce the wages, or more commentary that they can implement ‘arbeidstijdverkorting’ meaning they can reduce the number of hours worked per employee.
Allowing the companies to pay out less during hard times, while keeping there employees employed. In most cases the government will pay out the hours not worked during a certain period. This is what happened during covid, when companies where compensated for a certain amount of hours they could not fill in with activity.
This meant that as soon as the economy started up again in full swing, companies still had there employees and could easily increase the working hours again. And this also works when the economy is in overdrive and wages are rising fast. The social partners will than try to reduce increases in wages to a certain extent to decrease inflation and maintain proper export levels.
So this is a system in which all the parties involved have a stake in how things are run, and where not just the market controls everything. This allows lower lows but also lower highs.
Trying to get rid of local competition with dumping prices might work in the US, but in Germany there is that rule that dumping prices are not allowed. In particular not when it is used to attack (and in the end abolish) competition.
That creepy behavior of the people might add to that.
I am greeted at my local store as well, even by the people restocking the shelves. But I shop there since 15 years.
(And saying "hello" to the cashier is also normal.)
The little difference between a honest "Moin" and a creepy, psychopath like smiling "Hiiii, welcome to >insert store name
And that rule is there for historical reasons... Mainly some bank-backed coal monopoly
@@markus1351 didn't know that. Interesting
yeah i remember the times, it was quite funny...
btw u should watch some follow up videos, cause after that miserable performance by walmart the german discounters started to expand to the us
i heard they are pretty successful ^^
How crazy! If any employer asked me to do calisthenics to start a shift, 🙄 I would flatly refuse and I am English.
Und Aldi (Süd) is opening hundreds of stores every year in the US. And that doesn't include Trader Joe's which is owned by Aldi Nord. Fastest growing grocer in the US.
Both Aldis are privately owned and operated on wafer thin profit margin. They don't have any greedy shareholders. They don't save on wages and have a strong emphasis on regional supply chains.
I live in Switzerland and Aldi and Lidl have loads of Swiss products on display, each represented with the Swiss flag 🇨🇭. That way they show strong support for local businesses.
I have never seen anything made in switzerland, that does not have the flag on it 😂
@@Lafayette_Ronald_HubbardThat is true, but that is not what I meant. To put it more clear: They print a big flag on the price tags, too. So you really can't miss it. I also saw that with the 🇬🇧.
@@BigWhoopZH I know what you mean they do the same stuff for local products here in Germany, too. It was just a thought in my head 😅
@@Lafayette_Ronald_Hubbard Really? I moved from Cologne to Zürich last year and I never saw it in any Aldi or Lidl back in Germany.
@@BigWhoopZH It probably does not directly compare. You will surely know that the german flag is used more sparely around here, unless the worldcup is going. What I was thinking about are the posters that I always see with a local farmer boy holding a bucket of potatoes and such. You would not see a germany flag or big "made in germany" signs on the haribo isle, that is for sure.
only 1 light-hearted story from my experience working at Walmart in the Frankfurt Headoffice.
I worked in Frankfurt for Spar and later Walmart! It was a nightmare! Only US Manager without a clue of Germany and the worst of the German Manager.
One memorable incident involved Mr. Koenig, our IT Director. I sent out an email with detailed instructions and screenshots on how to set up the Walmart email, assuming a smooth process.
To my surprise, Mr. Koenig (IT Director), in his attempt to follow the instructions, ended up double-clicking on an image in the email. This action opened the image in Paintbrush, where he unintentionally painted around it. Subsequently, he called me to express his frustration, insisting that the information I had provided was not working.
I couldn't help but burst into laughter at the situation!
OMG so funny to read haha. I hope, because they like cameras, they had one recording during the selection procedure 😂
@@mizzya I have 1000 stories! He also put a view on a database on the AS400 (IBM) was a big machine and clicked on print. over 10.000 pages the IT staff had to call and confirm the print job. He did! Mr Koenig screamed at him! don't ask! Print this shit I want it! He knew it was wrong but at this stage, he only said: Yes Sir! Mr Koenig got 2 Pallets of printouts on the next day in his office! (over 250.000 Pages) Everyone was laughing in the office!
@@mizzya The stupid Walmart People installed a new belt from the US where the pallets get kicked into the trucks on the left and right with big metal panels. Stupid was only that in Germany the Pallet of Gurkens was only wrapped in foil (reduction of packaging) this thing smashed the hell out of the Gurken Glasses! That didn't work! and the way next to the belt was too narrow for the pallets!
@@mizzya In Hamburg the market was able to order, but this stupid Walmart System didn't solve the problem that the stock arrived! So with the new order, they also got the last order, and so on! They could not stop it! they had to rent shipping containers to store the stock! The City of Hamburg gave the market 4 weeks or they had to apply for a building permit! They opened a Container in March and found Silvester Rockets for New Year in it!
GM had to leave Germany too and Ford also stumbled, because they primarily skimmed off short-term profits instead of pursuing a long-term strategy. By the way, Walmart only owns 10% of ASDA in the UK these days.
Ford is a long term story !
They opened their first German factory in 1925 !!!
@@aoilpe Well, Henry Ford was a glowing antisemite and ruled like a dictator. I guess he liked the atmosphere in germany leading to the rise of Hitler, so it was only logical to go to germany during that time. Hitler was a huge fan of Henry Ford and his book "The international jew".
Besides everything that was said in the video and the comment section, Walmart failed in one area - American products. There are many ingredients and foods of "American Cuisine" you couldn't at that time (and sometimes still can't) find easily in Germany like blackeyed peas, red rice, pecan, cajun seasoning, double-rising baking powder, brown sugar, molasses, peanut oil (for a reasonable price), many chocolates and candies. Importing them from the US would have allowed them to stand out against the competition. Instead, they had the same old products as everybody else at a store that was far away and with a weird shopping experience. Why would anybody shop there? I know I didn't.
Walmart operated with a profit margin of 1%, which is totally normal for German chains. They did not fail, they bailed because they are greedy fucks...
This is because those things (especially with chocolate and sweets) are much better in Europe compare Hershey’s whit Lindt and you will never be able to like the taste of hersheys some American chocolate aren’t even allowed to be sold as chocolate. Because it Doesn’t have enough cocoa ( %) to be called chocolate. Same thing for candy allot of American candy’s have other ( Sometimes better) recipes because they can’t use specific ingredients (like red 40 and yellow 5) so they have to use other ingredients.
So even if they want to import American stuff they would not be allowed to.
Well, it's called Walmart, not Walsmart. We Germans usually feel an urge to run away when we see a sales person aproaching us (especially in the electronics departments). That's how we are. Besides that, the competition in the bargain price segment is and was huge. It's hard to make a name for your company here with good offers, because it's the norm. People here associate that with Lidl and Aldi already. Yet another reason might be the way we run errands. Big shopping trips for everyday stuff happen, but not too often. We are used to do smaller trips and buy things for a shorter period of time. It is convinient, because you can reach supermarkets easily by bike or even on foot if you want. You can go by without having a car. Walmart was doomed to fail with their concept over here. They would have needed to adapt radically to have any chance on the local market.
Hey Joël. I’m french and talking to myself. We loving unîtes states and Germany.
I'm guessing Jps isn't looking to work in Walmart Corporate in the future with strong opinions like that lol
But there's also a lot to it that the German wants to feel comfortable in the supermarket, among other things... that wasn't the case at Walmart... it looked like a cold warehouse with only shelves. just bad...Unfortunately, America doesn't work everywhere..
Surely, cold warehouse with only shelves is exactly what Aldi and Lidl offers. That is why I do not shop in the UK ones.
The same would happen to Walmart if they came to Switzerland 🇨🇭. Many CLEVER companies start their businesses here : if the business model succeeds, there’s quite a high chance that the company might make it in Germany 🇩🇪; if not : well , at least the company wouldn’t have thrown billions out of the window …
Aren't the operating costs quite a bit higher in Switzerland, though? I would have imagined they'd just start in one German state, or even city and see how it goes there, before expanding to the rest of the country.
Then again, the revenue is probably also higher in Switzerland. Still, I would imagine it taking a higher investment to get started in Switzerland.
All the costs are higher in Switzerland- but benefits also !
Joel, I am impressed by your intelligent and honest analysis of Wal-Mart's German folly. They just didn't bother to do their homework.
There are many stories floating around from Wallmarkt manager not understanding the deposit system and wasted many thousends of euro.
Then there is a story that they imported american stuff not noticing that powercable are different and sizes as well.
My fav story is the import of gigantic turkey (not fitting into the standard german oven) and wondering why nobody buy them... we no not celebrate like americans here.
They didn't try to adapt their products AT ALL as well! 😄 I heard that they sold the Standart milk and egg containers (which fit into no German fridge) and sold pillow cases, for example that didn't fit any German bed. 😂 How stupid can you get?! I mean, I understand bringing a little bit of another culture to other country's (and even encourage that!), but please do it by bringing authentic spices or something. Even Aldi in the US sells things, that I, as a German, have never seen before, but Americans buy on a daily basis. There ARE just some cultural differences. Aldi in the US adapted to the needs of the locals while simultaneously and suptly bringing their own German local products into play. Easy things like chocolates, bread and cereals.
Very interesting video, Joel. Your reaction was perfect. I could tell that you instantly recognized the single point of failure - cultural understanding. Walmart had a rocky start in Canada, but seems to have adapted. Target came later and utterly failed. It started selling off stores within months of opening. An business failure study of Walmart in Germany and Target in Canada would be interesting. Cheers, John in Canada
heres the thing - german discounters did successfully move into the US. Aldi does pretty well but here is the catch - the US based Aldi shops have almost nothing in common with the german Aldi shops. Products, layout, employment contracts, the union stuff....yeah US Aldi shops are not at all like german ones, thats why they work overseas
I worked at a store were the boss made the experience of having a greater at the door. Our sales went down during that "experience" bc people didn't felt confortable with that.
I was a child when they came and I went to about 1 store out of curiosity, because you see them in American movies and so on, thought the place was creepy and hightailed it out of there 😅
Walmart demanded extra money to bother you as well as their employees. That's a nonstarter.
But it was *also* the German business environment, we have extremely low food prizes for a reason. It's a shark tank (and you can argue companies making it here are more likely to make it elsewhere, especially ALDI, who arguably turned it into a shark tank in the first place)
I was working in key accounts at Henkel at the time. And a big problem with Walmart was that they didn't stick to the specifications. We specified the entire arrangement of our products on the shelf and Walmart never adhered to it. Top product at eye level etc.
I was in a Walmart in Germany one (1) time. The whole experience was extremely overwhelming. So many clerks trying to make conversation, everything was loud and huge and colorful, there was music playing and...I remember feeling like even the shopping cart was oversized. My parents in law got lost about half way through, and eventually we just went back out and said "yeah, no, let's go to Aldi". 🤷🏻♀️😅
During the last few years of Walmart being in Germany, I went to one of their stores rather often and it felt 100% like a normal German grocery store. No weird employee antics, no greeters, no fake smiles. It was a pretty okay store comparable to others like Real (now also dead) or Kaufland.
@@highks496 That's great! Looks like they tried to adapt eventually? 💙
@@highks496I believe towards the end the management strategy came from ASDA in the UK who at least had some better understanding of European culture
I worked as a cashier for Walmart (in Germany) and the customers were actually extremely annoyed by the program we had to complete. It was drilled into us how we had to greet them, how we had to say goodbye and what sayings we had to say in between, this was also controlled, sometimes openly, sometimes hidden.
But behind the scenes the climate was completely different and no friendly at all. The older employees had to be afraid of being bullied out with nasty and underhanded tricks.
For example, an employee had goods smuggled into her bag and since we were checked at the exit, she was of course discovered and she was accused of theft and terminated. Without notice!
But we all put our hands on the fire for this employee who, after 40 years in retail, has absolutely no need to commit a succinct theft. But it would be very inconvenient to cancel her the “normal” way.
Stories like this and similar ones were common at Walmart!
Yeah, it's just mind-boggling. Another reason for their failure which unfortunately also this video glosses over is the breakdown of their supply chain. Due to their underbidding prices, many local suppliers refused to work with them and they had to cart in even basic goods like milk and butter from other countries, raising their own operating cost further.
WalMart failed to "read" the market in germany AND didnt listen to the other companies. Then Walmart got problems with german law and labour unions. And they werent fair to their employees. And the mix of this parts let them mess up. Generally as a company you dont have to listen to other companies, but in some ways it would be better...
Walmart does not have any stores in Australia because their business practices do not comply with Australian laws, especially labour laws.
But on the other hand, the german model of Aldi works well in USA 😉
I remember Walmart coming to germany. I think this video sums it up pretty well. They came in in a very tough market with a lot of competition and neither understood the culture. Germans are also very sceptical in general, especially with an american epitome culture like Walmart. You know that germans would feel very uncomfortable with friendly cashiers 😂 Also some prices at Walmart were just too high. In general Walmart stores weren’t much different to german competitors like Metros ‘Real’ group, just weirder.
Walmart employee:"Hi there how can I he........"
German Customer:"To STFU would be a good start!"
Germans have no problem with actually friendly cashiers, but we despise fake friendliness.
And as we all know cashier isn't a great job, to force folks that already don't have it easy to fake smile all day long made it even worse.
Another example for the different customer attitude over here:
Germans expect to be left alone while shopping. If we have a question we won't be shy and simply ask an employee... meanwhile getting pestered with "can i help you" out of nowhere will just annoy us.
They imported pillow cases from the US to sell in germany..
US pillow cases dont fit on german pillos (different shape)
My 8year old nephew wouldve noticed that beforehand
They tryed to open walmart in Italy too. When they were told about our worker rights laws and being contacted by unions that told them they will be looked at very closely because of their bad reputation, the left the project before starting it
If you want slaves instead of workers, you can go back to your country and no one will miss you walmart
They failed in UK too, closing last shop in 2021
No walmart at all in Europe right now
I heard the loyalty song freaked out the Germans and reminded them of certain events that happened in the 40s. . .
The smiling thing reminds me of during the german version of Fraggle Rock they thought the actor was miserable but then found our the smiling thing just isn't their thing (actor said later it was the best job he ever had).
That and I've never seen guns sold in Canadian walmarts. Go to a sporting store.
Europe in general has stricter worker laws and most people don't like individuals being too friendly, while they will respond to people that are polite.
I mean Walmart really didn't care. They send over some of their US managers and higher ups to manage a totally different market. Those folks in charge of Walmart in Germany literally had no idea what they did wrong, till it was to late.
AFAIK, Walmart also charged Americans with the task of establishing their stores over here in Germany, which I believe is a major reason why it failed as well. They might have had a better chance, if they actually charged Germans with experience in the field with that particular task.
Having worked for a discounter, one other big reason how they can offer such low prices is because they have a limited stock, and the employees don't waste their time approaching customers (most of which just want their peace and quiet trying to shop anyway) or constructing nice displays, they put the stuff out there in their pallettes and boxes so that people can take them away, significantly decreasing "unnecessary" workload. Especially in rural areas like where I live, discounters are often run by a total of three to four people, two for each half of the day (7am to 8pm).
Yet more clever thoughtful analysis of a good video.
When Walmart first entered the German market, I worked at a hotel very close to Berlin´s (or even Germany´s?) first Walmart. We had a few customers who had been sent over from the US by Walmart to help with the transisition - Walmart employees of German origin who had emigrated to the US a couple of decades earlier and had been long standing Walmart employees.
That was a bit better than the only-English-speaking managers that had been sent first. While the store was in West Berlin, a lot of staff was from East Berlin and had learned Russian rather than English in school, so the new "German liasons" helped with communications.
But Walmart was not only up against the cultural differences of USA vs. Germany but got also caught up in the cultural differences between East and West Germans, with reunification having happened only a few years prior.
Those German-American Walmart employees were West Germans who had been out of the country and away from close contact with the nuances of cultural developments and all of the political and very practical upheaval the reunification brought to Germans´lifes. While there was no language barrier communicating with the staff from East Berlin, they sometimes were just as mystified about their culture as the originally sent Walmart managers.
We had some hilarious conversations at the reception desk, trying to puzzle out what had happened during their day at Walmart.
Australian here. I read that Walmart tried to open here, but when they found that they couldn't prevent employees from joining union, they pulled the plug. :-) We dodged a bullet.
If they'd tried to get employees to do exercises and yell the company name, they'd have been laughed out of the country.
My one visit to a Walmart in the US was an amazing experience (not in a good way). The "greater" was sooooo creepy.
I live in Sweden and we have the exactly same problem here right now between Tesla and the unions.
Great video. Love your honest genuine attitude on life!
Funfact: German supermarket chains successfully expanded to USA. The discounter Aldi is from what i have heard one of the fastest growing chains in the USA.
It is due to lower prices and less waiting time in line(little to no smalltalk)
the walmart and tesla spanking by germans made me so proud for my germans friends, but this behaviour wouldnt be accepted nowhere but US of A🙋🇨🇿na zdravi! Jp based coz he knows, hes seen the difference😂and just add Lidl is the best, also in 🇨🇿 their emploies get paid the most of all retailers here, definitely NOT minimum wage by faaar unlike walmarts modern slaves.. happy to spent my money there
I worked at a Lowes for 3 years. there is a store meeting every morning before opening--had to do the Lowes cheer. ( gimme an L,gimme an O, etc. ) very lame.
Walmart sold holding in asda so not in uk now
They still own 10% of ASDA
The explanation is so KAREN...
Wallmart sold some items under the purchaseprise , which did mostly hurt small family buisnesses .
And thats why you can be sued if u wanne disturb the marked by selling under price or doing overprice while monopolizing.
Tragic thing is the amount of Businesses that closed permanently thanks ro wallmarts Intervention.😢
decades ago, when I saw walmart the first time in my city, I was shocked since I din't know they entered the german market - but I never entered one, couldn't dare
I remember obscurely that Walmart once had entered the German supermarket landscape. I had been interested at first but had my doubts.... Then my mum and I went "shopping" at a newly opened Walmart next to our home. We left with a cart almost empty. What "threw" us off was the organization of the market, or the layout, the prizes that were about the same at Aldi or Lidl with products seemingly less quality. Not to mention the media reports on the "Walmart cheer" which, of course we didn't beliebe😂.
I have not finished it yet. but walmart did not get in trouble for having low prices. but for being a big and rich company and their tactic being to sell their wares at prices so low they lose money selling them. so everybody buys their stuff cause its unbelivably cheap, then after a year or three all the competition would have died out and they could raise prices as much as they want without competition. but that stuff is illegal in germany and companies are not permitted to sell at a loss in order to outdo competition.
It seems to be, ALDI has success in the USA.
But the do the same as they do here, small prices small stores and good quality. They do it just through the mass.
And as it seems, that the employees of US ALDI are more satisfied with the employer, than the average employee, it seems the small HR-work they do in Germany, where they are not among the most dedicated employers, this HR work is very good in the US-American perspective.
The most important error of Walmart was, they took US manager to run the business instead of local managers.
In Germany, and mostly Europe, you are not allowed to sell stuff at a loss. This is considered predatory because the big players always win by default. You HAVE to sell it higher than you bought. How much higher is up to you. This is called "loss leader strategy" and its prohibited.
To be honest Aldi went to the US with the German concept. But Aldi's concept is to operate as cheap as possible with products with a good quality. And I think everyone likes getting cheap products with a good quality.
Hey, I'm from Bremen in Germany and as a child I often shopped at Wal Mart! The interesting thing is that the Wall Mart in Bremen, Germany was also the largest Wall Mart in the world for a short time!
I had previously gone to Wertkauf before here in Bremen for years and found the staff at Wal-Mart a bit too friendly and almost intrusive, as if this had been trained into them. (I have to say that I always like to wander through the supermarkets all alone, carefully choosing the products and wanting to be left alone). When I heard that personal relationships within the workforce were forbidden and that a lot of pressure was being exerted, my sympathy waned considerably, especially since Wertkauf was a really excellent supermarket in comparison and, as you had already noticed, it was huge. The upper floor was later closed down and today only half of the area on the ground floor is still in use.
Thirty years ago a lot of shitty US - MLM - companies wanted to get the peoples money here. One of my friends tried to work at one of them. I've forgotten the name, they sold toys. There was a short meeting every morning where the boss wanted the Star Spangeld Banner to be sung. By the german employees! My friend left the same morning. As far as i know none of that companies made it.
I watched the video from Amway convention in Poland. That was creepy as hell and when they announced the national anthem it was huge WTF!?! (Polish, not US) We don't sing anthem on any given occasion. It must be strictly patriotic event or national holiday not a jamboree of peddlers.