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Wal-Mart made record
losses in Japan - consumers world-wide seem to shun its social dumping
and doubt its quality Wal-Mart lost almost half a billion USD in Japan during the six first months of this year. This adds to what is emerging as an embarrassing failure in trying to export the company's operating concept abroad. This summer, Wal-Mart has already thrown in the towel in Germany and sold its unsuccessful Korean operations to local competitor Shinsegae. Together with its uphill struggle at home in the United States, the poor performance of these foreign subsidiaries have caused both the company's result and its share prices to tumble. For the first time in over ten years, the retailer had to report last week on a drop in its quarterly profits. They declined to USD 2.08 Billion from USD 2.8 Billion the previous year. Now, the bad news continue to come in. In Japan, Wal-Mart subsidiary Seiyu lost 54 Billion Yen or 465 Million USD during the first half of this year. This is five times more than the company's loss for the same period the year before. Also the total sales nosedived almost three per cent. Walmartization does not travel well Clearly, neither Wal-Mart's business concept nor its social dumping - the so-called Walmartization - work in developed economies with a social dimension. Many consumers shun the Bentonville giant and prefer to do their shopping in stores where they know that workers are treated correctly and with dignity. There is also more and more uneasiness and suspicion about many of the products sold. Squeezing the last drop from suppliers can hardly promote safety and quality. There is also a growing aversion against buying, consuming and using products which could well have been made under inhuman conditions. That the tide is fast turning against Wal-Mart at home has not gone unnoticed abroad. Consumers start to know that the retail giant denies its American workers their fundamental rights, and many of them vote with their legs, going to other stores if they have a choice. The poor business results in Germany, Korea and Japan should be taken seriously in Bentonville, as signals that something basic has to be repaired to stop the giant retailer from gliding into a dangerous downward spiral.
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