International Retailing MKT501C2

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International Retailing MKT501C2

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Describe the various levels of political structure upon which the ... of the 110,000 sq m Grand Littoral centre (comprising 20 large stores and 180 units) ... – PowerPoint PPT presentation

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Title: International Retailing MKT501C2


1
International Retailing (MKT501C2)
  • Week 6 Public Policy

2
Aim
  • To provide students with an appreciation of the
    political environments and regulatory issues
    which retailers face in global markets.

3
Learning Outcomes
  • Describe the various levels of political
    structure upon which the international
    environment may be assessed
  • Demonstrate an awareness of the various types of
    regulatory control
  • Analyse the differences in nature of legislation
    between markets
  • Identify the key questions about a countrys
    political and legal environment which should be
    considered by an international retailer
  • Make linkages with other environmental factors
    which impact upon international retail expansion

4
Environmental Variables
  • Legislation
  • Economic
  • Social
  • Cultural

5
The Global Political Structure
  • Inter-state - where states combine to regulate
    trade and may have agreed to some form of
    economic and/or political union
  • State - where a unitary or federal state
    regulates trade within set, internationally
    recognised boundaries
  • Local - where local government regulates trade
    within boundaries accepted or set by the state of
    which the locality is a constituent part

6
Political Condition at the State Level
  • Is the state politically stable?
  • What are current or likely politically disruptive
    issues within the political environment?
  • Are these democracies?
  • Does the party of government have general support
    for its economic policies?
  • Is the party of opposition opposed to fundamental
    economic principles of the government?

7
Regulatory Control
  • Vertical relationships
  • Planning regulations
  • Opening hours
  • Pricing

8
Planning Law Belgium
  • Loi Cadenas (Padlock Law) (1937-1961)
  • Forbade the development of large department
    stores
  • 1973 restriction on opening hours
  • 1975 Business Premises Act restricting store
    development. Total size of developments varied
    between 1,000 sq. metres and 3,000 sq. metres
    depending on location
  • Restrictions reduced further to between 600 sq.
    metres and 1,500 sq. metres in 1994

9
Planning Law France
  • 1973 Loi Royer Law
  • Preventing retail developments of over 1,500 sq.
    metres in towns with more than 40,000 inhabitants
    or over 1,000 sq. metres elsewhere
  • More stringent steps taken in the 1990s and new
    Loi Royer legislation introduced in 1996 whereby
    developments of over 300 sq. metres are
    restricted
  • Potential impact on discounters and category
    killers who had been adapting to the 1000 sq m
    mark

10
Planning Law France
  • 1973 Loi Royer Law
  • Despite the restrictive legislation, large scale
    food retailers have grown rapidly during the past
    20 years, at the expense of traditional stores
  • The restrictive legislation helps the large-scale
    businesses that are currently operating in France
    and is a barrier to entry for newcomers

11
Recent Merger And Acquisition Activity In France
  • Auchan and Docks de France
  • Carrefour and Cora
  • Promodes and Casino
  • Carrefour and Comptoirs Modemes
  • Systems U in partnership with Leclerc
  • Carrefour and Promodes

12
UK Retail Planning Policy
  • Late 1980s and early 1990s - laissez faire
    approach
  • Revised PPG6 IN 1993
  • Further revised PPG6 in 1996
  • Retail growth pressures forcing companies to look
    towards overseas expansion

13
Relaxation of Regulation
  • Planning
  • The relaxed attitude to planning in southern
    Europe has had a deep impact on the retail
    landscape
  • In Spain, the laissez faire approach seen until
    recently has made the country the target of
    leading European chains
  • Interest in Spains hypermarket sector will have
    a major effect on its smaller stores
  • The liberalisation of regulations in European
    countries has a direct bearing on individual
    retailers choice of markets, e.g. Boots in
    Netherlands

14
Recent Development Activity
  • Burst of activity from shopping centres permitted
    before planning policies were tightened
  • e.g. in France the opening of the 110,000 sq m
    Grand Littoral centre (comprising 20 large stores
    and 180 units)
  • Retailers have been forced to move overseas for
    further development
  • French hypermarkets amongst the most
    international
  • Increasing focus on merger and acquisition
    activity
  • Increase in shopping centre development leading
    to increasing cross-border moves

15
Recent Development Activity
  • Tight planning legislation restricting the
    development of new store formats, e.g. warehouse
    clubs in the UK, factory outlets in France
  • Retailers have been forced to focus on town
    centres, and adapt their format, e.g. Tesco and
    Sainsburys
  • Development of home shopping

16
Planning Law Japan
  • Large Stores Law introduced in 1937
  • Store size thresholds imposed in Japanese cities
    of different sizes
  • 1974 - permission required for premises of 3,000
    sq. metres or more in the 11 largest cities in
    Japan and a threshold of 1,500 sq. metres
    elsewhere
  • Threshold lowered to 500 sq. m in 1979
  • Increased complexity of the law by the late 1980s
  • Relaxation of the law in early 1990s

17
Opening Hours Legislation
  • Germany
  • The Ladenschlussgesetz (Shop Opening Hours Act)
  • Restricted shops to opening between 7am and
    6.30pm on weekdays and to remain closed on
    Sundays
  • Usual shopping hours on Saturdays were 7am until
    2pm

18
Opening Hours Legislation
  • Germany
  • 1989 extension to allow late openings on
    Thursdays until 9pm
  • East Germans favouring longer shopping hours
  • 1996 - weekday openings changed to 6am - 8pm and
    Saturday openings changed to 6am - 4pm

19
Relaxation of Regulation
  • Opening Hours
  • UK Sunday opening introduced in 1994
  • Restrictions eased on German opening hours in
    1996
  • Dutch shopping hours liberalised in June 1996

20
Regulations on Pricing
  • French pricing law - Loi Galland
  • No special regulations covering pricing in
    Denmark, Germany, Spain, Italy, UK and Sweden
  • Sales at a loss prohibited in certain
    countries, e.g. Belgium
  • Refers to selling a product at invoice price
  • Protection of small retailers
  • Development of private label goods more
    attractive
  • Luxembourg and Germany allow goods to be sold at
    lower than invoice price, but only at certain
    times in the year

21
Summary
  • Legislation is only one of several environmental
    factors impacting on retail expansion
  • Changing nature of legislation over time
  • Differences in nature of legislation between
    markets
  • Traditional barriers to entry in the Pacific Asia
    region but the situation is changing
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