Accounting for around 14-15 per cent of the gross domestic product (GDP), the Indian retail industry is estimated to be worth around US$ 500 billion currently. Home to one of the top five retail markets in the world, India offers immense scope of growth and opportunities in this arena. As of now, almost 90 per cent of the Indian retail sector is controlled by tiny family-run shops i.e. the unorganised segment. Thus, organised retailers have a lot of room for further penetration in this flourishing economy. In 2010, larger format convenience stores and supermarkets accounted for about 4 per cent of the industry, and these were present only in large urban centres. Now the trend is changing, and such concepts are mushrooming in smaller cities and towns as well. Organised retail segment is expanding at 20 per cent a year, driven by the emergence of shopping centers and malls and growing middle class
Pantaloon RetailPantaloonsCentralBrand FactoryEzoneHometownPlanet sportsBigbazarFoodbazarKB’s Fair Price Shop K Raheja GroupShoppers stopCrossword,InorbitHyper cityTata GroupCromaLandmarkPoltrona Frau Group Design CenterStar BazaarTashiWestside RPG GroupSpencer’sBooks and BeyondMusicWorld Landmark GroupCentrepointBabyshopSplashShoe MartLifestyleBeautybayIconicQ Home DécorCandeliteMaxShoexpressEmaxLifestyle Department StoresSPAR hypermarketsLandmark InternationalFootwear Division Parimal GroupPiramyd MegastorePiramyd SupermarketJamin RelianceReliance FreshReliance TrendsReliance FootPrintReliance Digital AV Birla Group More
Offer broad assortment with even lower pricesOffer more product variety, achieve lower price by reducing expense, increase productivity and leverage technology to improve supply chain efficiency.Meet local needs while leverage global resourcesAlways align service to fastest-growing consumer demand in market, focusing on EDLP, targeting middle-income customers looking for quality-value combination.Winning in Global eCommerceBold competitive advantage by real-time communication between stores, distribution centres and the home office. Currently offers social, mobile and global platforms
Japan is a small country with limited spaces, which has several implications for Walmart as below:Small housings and apartment sizes, with high rent prices means that Japanese would need to minimize their purchases. Lack of storage room to store purchases. A typical apartment in Japan would be 1LDK (1 room apartment with Living, Dining, and Kitchen area). 1 LDK apartment would be about only 27,55 sqm.Several small purchases.Minimize purchases, they would make their purchases several times a week, in small quantities. This means that stores would have to be readily available within reasonable distance, and bulk purchasing is discouraged. Compared to Walmart usual practice of centralized, big stores, with bulk purchasing to save costs, a neighborhood convenience store would be more suitable for the Japanese people.High operating costs, especially because of the prices of rent and buildings in general. Average commercial land prices in Japan is USD 2,017/sqm, with average commercial land price in Tokyo reaching USD 19,956/sqm, followed by Osaka with average commercial land price of USD 6,360/sqm.Inability to apply original supply chain modelLots of stores, lots of supplies to be delivered, but no warehouse space, or overtly expensive warehouse space, since space is a premium in Japan. Walmart’s supply chain management that is one of the strengths of Walmart in US, and based on US model, can't be applied here. That's why Toyota invented JIT: to avoid the constraint of using warehouses, and hence, adding more costs to the product line.
Trash categorizationIn Tokyo, trash (gomi) has to be divided into three categories (combustible trash, non-combustible trash, recyclable trash) for proper disposal. Costly trash disposal procedureDisposal of bulky waste, such as a table, a shelf, or an old TV, requires a special procedure. You need to call the local ward office and arrange for a time for them to pick up the bulky waste. Before they come, however, you need to buy a sticker to stick on your large trash. To throw away an old TV, for example, costs about 300 yen.Impact on WalmartThis legendary Japanese environmental consciousness about waste disposal, added to their minimalist lifestyle, would discourage any bulk purchases from Walmart, effectively nullifying Walmart’s economic-scale-driven model.
STSTEM Due to Carrefour’s extreme level of store decentralization support areas that were not directly under store responsibility, such as IT and logistics, were normally treated as vendors. Over time this led to under investment and the company’s support services generally lagged behind the market leaders in terms of efficiencyCULTURE Dint Understand the culture of South Korea and applied global strategies.ETHICS Negative attitudes toward foreign discount chain stores. Carrefour has been criticized for the treatment of its workers throughout the worldLEADERSHIP Carrefour filed a court case against the local union, demanding damages for alleged losses caused by trade union members coming to work in their union jackets.
INDIAN RETAIL INDUSTRY
Expanded by 10.6 per cent between 2010 and 2012 and
is expected to increase to US$ 750-850 billion by 2015.
Food and Grocery is the largest category within the retail
sector with 60 per cent share followed by Apparel and
Accounting for around 14-15 per cent of the gross
domestic product (GDP), the Indian retail industry is
estimated to be worth around US$ 500 billion currently
Pantaloon Retail/Future Group
K Raheja Group
AV Birla Group
Quiz on retail stores and their
Hyper city -
k Raheja Group
Planet sports – Future Group
Piramyd Megastore Megastore - Parimal Group
AV Birla Group
Globalization’s lure is almost irresistible. With US economy
struggling to expand and Europe on brink of recession, fast
growing markets in the developing world offer the best
opportunities for boosting revenues and profits
When we focus on Grocery Retail Industry there are few
exceptions, globalization benefits had not accrued to
retailers. International players are almost entirely absent
from even the largest retail markets.
And every grocery retailer that has ventured overseas has
failed as often as it has succeeded.
Top 5 Retailers in the world
The Kroger company
Why Retailers go Global
Since retailing is low margin business, big chains
have been forced to move into overseas markets.
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new
opportunities for existing leaders.
A need to make up for constraints imposed by
regulatory agencies when a retailer becomes too
big for its home market.
Carrefour began to enter international markets after a
law was passed in France in 1963 to restrict the
development of large stores
American multinational retailer corporation
Large discount department stores and warehouse
World's third largest public corporation
(Fortune Global 500, 2012)
Largest retailer in the United States, and in the
8,500 stores in 15 countries, under 55 different
(UK - Asda, Japan - Seiyu, India - Best Price, WOS
in Argentina, Brazil, Canada)
Mixed results in investments outside North America:
– UK, South America, China are successful
– Germany, South Korea, Japan were unsuccessful
• Offer broad assortment with even lower prices
• Meet local needs while leverage global resources
• Winning in Global eCommerce
Reasons for failure in Japan
Japanese tends to prefer quality over low prices, which
constrasts with Walmart core value: EDLP (Every Day Low
When a nation has a very strong purchasing power, such as
Japan, why settle for cheap stuffs when you can buy high
quality expensive products and still have money to spare?
Japan is a small country with limited spaces, which has several
implications for Walmart as below:
Small housings and apartment sizes, with high rent prices
means that Japanese would need to minimize their
Several small purchases.
High operating costs, especially because of the prices of
rent and buildings in general.
Inability to apply original supply chain model
Do you consider aspects such as
waste resources and energy
when purchasing daily products
Waste Disposal in Japan:
Costly trash disposal procedure
Impact on Walmart
Line of governance
“Retailers effectively represented the interest of the manufacturer,
rather than that of consumers” (Tsukiizumi, 2004)
• Protection from above
Retailers are often protected from financial risks by wholesalers and
manufacturers through a number of distinctive market practices (such as
Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting
and exclusive dealerships.
Closed-network impact to government
For foreign retailers, Japan’s complex retail and distribution system has
long been inaccessible, so much so that the U.S. government considered it
a nontariff barrier and a structural impediment for U.S.-Japan trade
Impact for Walmart
Small profit margin
Walmart supply chain
management system aims for
strategic sourcing to find
products at best price from
suppliers. Walmart establishes
strategic partnerships with
most of their vendors,
offering potential long-term
and high volume purchases in
exchange for the lowest
Walmart’s business model is
based on a low price strategy
and low transportation costs
allow it to sell its products at
the lowest possible prices.
EDLP allows Walmart to break
even or make small profit per
sales, while customers also
win by saving money buying
at low prices.
Japan is used to the topbottom approach, while
Walmart insists on bottom-up
approach. Walmart has to
challenge the unusually
powerful Japanese suppliers
and manufacturers to
conform with its Walmart
Japan is more
supply chain and
difficult for US.
Japan strives for
with valuegoods approach
Japan may have
laws which may
be viewed as
Japan may plan
ahead and more
strict, contrast to
First changes brought by Walmart is by successfully
persuading Seiyu to dismiss 25% of their HQ staff, including
1500 employees and managers.
Japan never have anything like this mass layoffs, because
this kind of action would create too much embarrassment
for a typical Japanese company.
Walmart, a US corporation, is seen as the outsider who
meddle too much in Japan’s community
Walmart viewed it as a company’s priority to cut cost, in
order to implement EDLP (individualism)
This created a climate of resistance for policies that
Walmart is trying to implement
Introducing cheap products from China doesn’t
help, especially with bad relations between Japan and
High communitarianism: high peer pressure, need
peer approval to make decisions.
High uncertainty avoidance: tried and true is
better, something new is to be avoided.
Variety offered by Walmart is not attractive to
Japanese, who tends to choose a small selection of
tried and tested product.
Not to mention, they are wary of the “new” products
offered by Walmart.
Walmart failure in Germany
Wal-Mart entered the German market at the end of
1997 with the purchase of 21 stores from Wertkauf
and added to this in 1998 with the purchase of 74
Interspar stores from the French
company, Intermarché. After only 4 years of
operation in Germany it was clear that Wal- Mart
was struggling with estimated accumulated losses
at around 1 billion Euro, although only estimates
were available as the company published no
The nature of the German market
The senior managers
Supply chain issues
Employee relations issues
Customer relations issues
Image and publicity
By 2006, Wal-Mart had 85 stores remaining in Germany. In
July that year these were sold to a rival company Metro. In
typical fashion no financial details were disclosed but the
deal is estimated to have been concluded at less than the
value of the assets at a loss to Wal-Mart of US$ 1 billion.
Just after the conclusion of the deal in Germany, Wal-Mart
sold all its stores in South Korea and by 2007 operates in
only 13 countries. Its international rival Carrefour operates
in 29 countries. Historically Wal-Mart has always done best
in markets closest to the USA, namely Mexico and Canada.
Asda in the UK is a rare success contributing 43% of WalMart’s international revenue.
The failure in Germany is summed up by two academics
thus: “Wal-Mart’s attempts to apply the company’s proven
US success formula in an unmodified manner to the German
As of 31 Dec. 2012, Carrefour group operates over
9,994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia.
Its 44 stores in Thailand, 23 in Malaysia and two in
Singapore are for sale.(2010)
Carrefour was one of the first foreign grocers to open
shops in South-East Asia in the 1990s. But the laterarriving Tesco proved cannier in figuring out what
consumers wanted. When the firm found out that Thai
shoppers travelled for miles by bus to its “big-box”
stores, it opened smaller stores in rural towns. Carrefour
focused on Bangkok's higher spenders and stuck to its
On April 28, 2006, Carrefour, the second largest retailer
in the world, sold its 32 hypermarkets in South Korea to
E.Land Corporation6 (E.Land) for 1.75 trillion Won7. The
sale marked the exit of Carrefour from the South Korean
organized retail market. Then agreed to 1.48 trillion in
As a part of the plan, Carrefour exited several markets
including Japan, Mexico, Czech Republic and Slovakia
and began concentrating on the markets where it had a
strong position including Brazil, Poland, Turkey and
Failure in South East Asia
Choice of going alone(no local partners)
Activist shareholders to reverse the firm's global expansion
and focus on Europe.
The company failed to localize its stores and the products
sold according to the needs and preferences of Korean
All top managements from France, this was not viewed
favorably by the local employees, and Carrefour too often
faced problems from local labor unions.
Localization of products
A pleasant shopping environment and friendly service are
crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and
buy less each trip than in other countries because of their
desire for fresh food, such as high-quality meats and
Due to Carrefour’s extreme level of
store decentralization support areas
that were not directly under store
responsibility, such as IT and
logistics, were normally treated as
vendors. Over time this led to
under investment and the
company’s support services
generally lagged behind the market
leaders in terms of efficiency
Dint Understand the culture of
South Korea and applied global
Negative attitudes toward foreign
discount chain stores. Carrefour has
been criticized for the treatment of
its workers throughout the world
Carrefour filed a court case against
the local union, demanding
damages for alleged losses caused
by trade union members coming to
work in their union jackets.
On the departure of Carrefour (and the subsequent
departure of Wal-Mart) from Korea, the South Korean
media reported that 'Native Korean retailers won a battle
with the world's retail Goliaths.'
Tesco is the world's third largest retailer with a turnover
of £72 billion ($115 billion), a presence in 12 countries
with a market leader position in 6 of them. With over
half a million employees, 6600 stores, and a strong
online business, Tesco is dedicated to bringing best
value, choice and service to millions of customers each
What drives us is our Core Purpose, which is: WE MAKE
WHAT MATTERS BETTER, TOGETHER.
Failure in USA
The stores had only self-checkouts.
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail
landscape is different from the UK's
Is a German global diversified retail and wholesale/cash
and carry group based in Düsseldorf. It has the largest
market share in its home market, and is one of the most
globalized retail and wholesale corporations.
It is the fifth-largest retailer in the world measured by
revenues (after Wal-Mart, Carrefour, Tesco and Kroger)
The Kroger Co. (NYSE:KR) is one of the world's largest
grocery retailers, with fiscal 2012 sales of $96.8 billion.
Kroger’s Family of Stores spans many states with store
formats that include grocery and multi-department
stores, discount, convenience stores and jewelry stores.
We operate under nearly two dozen banners, all of which
share the same belief in building strong local ties and
brand loyalty with our customers.
Kroger operates 40 manufacturing plants and packages
and sells items for other retailers under the InterAmerican Products Company name.
Simple Truth Organic
Fry's, Smith's, Fry's Marketplace
Kroger, Kroger Marketplace
Ralphs, Food 4 Less, Foods Co.
King Soopers, City Market, King Soopers
Kroger, Kroger Marketplace
Fred Meyer, Smith's
Kroger, Food 4 Less
Kroger, Kroger Marketplace, Jay C, Ruler
Foods, Pay Less, Owen's, Food 4 Less, Scott's
Dillons, Dillons Marketplace
Kroger, Kroger Marketplace
Kroger, Dillons, Gerbes
Baker's, Food 4 Less
Smith's, Food 4 Less
Smith's, City Market, Price Rite
Kroger, Kroger Marketplace
Fred Meyer, QFC
Kroger, Kroger Marketplace
Kroger, Kroger Marketplace
Smith's, Smith's Marketplace, City Market
QFC, Fred Meyer
Smith's, King Soopers, City Market