What Is International Retailing?

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What Is International Retailing?

• All activities involved in selling products and
  services to final international consumers for
  their personal consumption

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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 Philippine
s 120.1 547 28 South Africa 60.4 675 7 South
Korea 730.0 60 2 U.S.A
1516.3 170
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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
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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

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(2)Specialized Markets

• Markets that contain specialty stores
  specializing in a particular product category
• Exist worldwide in both developed and developing
  countries

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(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

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(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

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Retail Formats (Food) (1) Super Stores /
Hypermarkets

• Hypermarkets Large retailers that combine
  supermarket, discount, and warehouse retailing
  principles

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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

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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

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Food Fight in the Aisle de FranceLos 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

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Reasons For Change

• Poor economy
• Growth of two career couples

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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

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Consequences

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

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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.

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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

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Convenience Stores, Kiosks

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