Wal-Mart in Germany is not doing well

Wal-Mart in Germany is not doing well:
European commerce workers don't want to be low-paid cheerleaders, unions say

The Arkansas anti-union commerce giant is discovering that its approach is not well received in Europe. A number of recent German newspaper articles tell how things are turning sour for the world's largest retailer.

Tricks like removing meat cutting from stores to stop workers from unionising do not work. In Germany, the company is well organised by Uni affiliates HBV and DAG. Both unions get an alarming message from the company's workers. The approach to labour relations just does not work. Apparently afraid of their own staff, Wal-Mart has strictly forbidden the works councils of the previously separate companies Interspar and Wertkauf to meet together. An article in the food industry magazine Lebensmittelzeitung also tells about only sporadic consultations with the elected personnel representatives.

The number of workers is now going down. In fact, Wal-Mart has difficulties in finding workers for its central warehouse, which is said to be because of the low wages that are offered. This affects the goods deliveries to stores, where not much is seen of the famous logistics of the multinational. In Lebensmittelzeitung, Jürgen Glaubitz of HBV is quoted as saying that the German workers "do not like to be regarded as cheerleaders, but as personalities with their own ideas and rights."

Also Germany's influential economics weekly Wirtschaftswoche takes up Wal-Mart's problems. In a recent article, the newspaper says that the company is now under pressure from competitors and unionists, but also its own shareholders. Share prices are now at only 44 dollars, down from 70 dollars in the beginning of the year. The German weekly says that analysts consider weaknesses in the foreign establishment strategies to be a main issue. The newspaper also draws attention to the fact that only in Mexico and the United Kingdom does Wal-Mart's market position equal that in the United States while Carrefour is far ahead for instance in South-East Asia.

Wirtschaftswoche describes also concrete examples of the poor performance of Wal-Mart in Germany. Stores are described as dirty and poorly kept, cartons are pallets are lying around, vegetables are not fresh. Expediters have to wait for hours to load goods at the central warehouse. And the largest German competitors, many of them with much more modern and well kept stores, have successfully answered to the challenge of 'everyday low prices'.

Analysts in Germany say that Wal-Mart must expand further in order to succeed on the German market. The local management counters this, according to Wirtschaftswoche, by saying that they want to be the best, not the largest. However, counters the newspaper, this may be less a question of a lack of will to expand than a lack of possibilities. There is nobody among the main competitors who wants to sell to Wal-Mart.