Title: International Retailing MKT501C2
1International Retailing (MKT501C2)
2Aim
- To provide students with an appreciation of the
political environments and regulatory issues
which retailers face in global markets.
3Learning 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
4Environmental Variables
- Legislation
- Economic
- Social
- Cultural
5The 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
6Political 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?
7Regulatory Control
- Vertical relationships
- Planning regulations
- Opening hours
- Pricing
8Planning 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
9Planning 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
10Planning 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
11Recent 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
12UK 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
13Relaxation 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
14Recent 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
15Recent 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
16Planning 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
17Opening 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
18Opening 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
19Relaxation 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
20Regulations 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
21Summary
- 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