What Is International Retailing? “All activities involved in selling products and services to final international consumers for their personal consumption”

Great diversity in Retail Patterns Retail Outlets Population Employees Country (000) per Outlet per Outlet Argentina 199.5 164 4 Australia 160.2 111 5 Canada 157.2 183 9 India 3540.0 253 NA Japan 1591.2 79 4 Malaysia 170.6 109 8 Mexico 899.3 96 2 Philippines 120.1 547 28 South Africa 60.4 675 7 South Korea 730.0 60 2 U.S.A 1516.3 170 13 14-9 SOURCES: International Marketing Data and Statistics, 21st ed. (London: Euromonitor Publications, 1997), and "Indicators of Market Size for 115 Countries," Crossborder Monitor, August 27, 1997. Irwin/McGraw-Hill

Retail Formats (General Merchandise): (1)Specialty Stores Specialty Stores (narrow product line and wide assortment) Very popular, especially in developed countries; independent stores often dominant

(2)Specialized Markets Markets that contain specialty stores specializing in a particular product category Exist worldwide in both developed and developing countries

(3)Department Stores General Retailers that offer a broad variety of goods and wide assortments U.S. & Canada losing share to discounters, specialty stores, category killers European department stores focus on home countries with eye towards European Union Often include supermarket sections

(4) General Merchandise Discount Stores Retailers that sell high volumes of merchandise, offer limited service, and charge lower prices, e.g. Wal-Mart, Target, Home Depot

Retail Formats (Food): (1) Super Stores / Hypermarkets Hypermarkets Large retailers that combine supermarket, discount, and warehouse retailing principles

Trends in International Retailing Both U.S. & European retailers expanding internationally Top 10 Global Retailers (1999) Wal-Mart (U.S.) Metro AG (Germany) grocery Sears Roebuck (U.S.) Rewe Gruppe (Germany) grocery Edeka Gruppe (Germany) Aldi Gruppe (Germany) grocery Dayton Hudson (U.S.) Carrefour (France) grocery Tenselmann Gruppe (Germany) Consolidation & acquisition among retailers

Issues in International Retailing Local regulations – e.g. restrictions on expansion of hypermarkets; operating hours Taxation – e.g. Taxes higher in Norway than Denmark; Consumers shop on duty free shop on Ferry Consumer Preferences- e.g. U.S. shop less frequently & buy in bulk; Argentina prefer to shop in small food stores

Food Fight in the Aisle de France Los Angeles Times 4/2/96 “Huge hypermarkets (hypermarches) are squeezing out quaint boulangeries. The government is cracking down on chains, but shoppers-albeit guiltily-are picking convenience over culture.” 1,000 up 100% from 1985

Reasons For Change Poor economy Growth of two career couples

Resistance To Change (Ethnocentric) French deeply conflicted. “They sniff at crass commercialization in America, which they see as a free market run amok, and they lavish praise on their neighborhood stores but more than half of food purchased at larger supermarkets.” New Stiffer Law prohibiting selling anything below cost; Sets up council to monitor compliance

Consequences Lower priced goods Profitable retailers Small businesses in villages going under Character of countryside and even urban center changing Market for larger appliances

Brainstorm - How To Succeed Culturally Congruent Strategy E.g. employs 22 bakers who make 4,000 baguettes a day from fresh (not frozen) dough and a wide variety of pastries - all in ovens visible to shoppers. Roasting chickens can be chosen right off the rotisserie similar to butchery Helpful workers clean and skin fish while you wait.

Warehouse or Wholesale Clubs Require members to pay an annual fee; operate in low-overhead, warehouse-type facilities, offer limited lines of brand name and dealer groceries, apparel, appliances, etc. at low prices

Convenience Stores, Kiosks Small retailers located in residential areas, open longer hours, carry limited lines of high-turnover necessities.