Current trends in food retailing

Turkey Back to top

General retail economy

In the wealthier west of the country, in urban areas, supermarkets account for 50% (2005) of grocery sales.

Retail multiples

Carrefour

1999, Carrefour had 32 supermarkets in Turkey

Tesco

2003, Tesco entered Turkey, buying a majority stake in the Kipa chain with 5 stores.

2005/6, Tesco sales were £182 million; profits were £6 million.

2011, Tesco had 121 stores, a market share of 1.5%, and sales were £700 million.

Iran Back to top

General retail economy

Iran has a fragmented food supply chain because individual retailers and suppliers negotiate contracts, there is no consolidation of the supply chain and so economies of scale are lacking.

Retail multiples

2008, Carrefour is building a supermarket on the outskirts of Tehran, near the Azadi sports stadium, a middle-class area. Carrefour plans a further 20 hypermarkets for Iran by 2028.

India Back to top

General retail economy

India, with its large, young, and growing population, and an emerging relatively wealthy middle class, presents an attractive target for expanding supermarket chains. However there has been political resistance to the entry of large Western supermarket chains. It was only in 1947 that India gained independence, from having been a British colony, and India has no desire to see its economy ‘recolonised’ by large Western multinationals. India also has many small farmers and many small shopkeepers, and it is a democracy; these groups would vote to keep supermarkets out (see below). However in 2013 the Indian Government voted to allow the entry of Western supermarkets such as Tesco and Wal-Mart.

The total size of India’s retail sector was estimated at US$ 300 to 325 billion in 2008. It was US$ 370 billion in 2011.

India has (2008) around 14 million retail outlets; almost all of these are small family-owned stores known as kiranas. India’s food supply chains are very inefficient, with (2011) about a third of food harvested rotting before it reaches the shop shelves.

Indian retailer numbers 1993-2001 (from Managing Retailing, p.21, 2007, Sinha et al)

year	Urban retailers	Rural retailers	Total retailers
1993	2,693,000	5,364,000	8,057,000
1996	3,074,000	6,633,000	9,707,000
1997	3,200,000	7,200,000	10,400,000
1998	3,400,000	7,200,000	11,100,000
1999	3,500,000	8,400,000	11,900,000
2001	3,700,000	9,000,000	12,700,000
2001	3,800,000	9,800,000	13,600,000

‘Modern’, or supermarket, retailing, accounts for under 10% of the total retail market (2011). This means the Indian retail sector is very fragmented, lacking any dominant supermarket chains. India also lacks any major wholesale or distribution chains, despite being home to one sixth of the world’s population. The Indian government was also keen on opening up its food retailing sector [to large Western supermarkets] but the government has been forced to backtrack so what after protests from small shopkeepers.

In 1999 India’s first supermarket, called Crossroads, opened in Mumbai.

Who would gain from supermarket development in India

The Economist (31 May 2008, p.80/82) makes a case for India to allow foreign retailers into its territory.

1) Low income households would benefit. Where they have access to supermarkets they shop cannily, buying discount items and loss-leaders but staying loyal to small shopkeepers for the bulk of their purchases.

2) The small-shopkeeper sector in India seems robust at present, and on current trends will still have 85% of the retail market in 2013.

3) The opening of a supermarket nearby does reduce local small shops trade by about a quarter, but this recovers and, says The Economist, is back to pre-supermarket levels within 5 years.

4) Opening a supermarket nearby forces small shopkeepers to become more efficient, and some small shops even hire more staff for home delivery services. ‘Only 1.7% of [India’s] small shops close each year’, says The Economist (ibid). Small shopkeepers could join in co-operatives to gain buying power (but this could pass downwards price pressure back up the food chain onto India’s already-poor farmers).

Who would lose from supermarket development in India

The opposing argument is that if India opened its grocery retail market fully to foreign supermarkets, low income families might initially gain on price but could lose the opportunity to use local small shops, if the closure rate of these accelerated from its present (2008) 1.7% a year. With small shops gone, the supermarkets could offer less loss-leaders and discounts. Some families could be left in an Indian version of a ‘food desert’. And whilst shoppers might gain, there could be large employment losses in the retail sector. Economics says there should be net welfare gains from supermarket liberalisation in India, but the social equity question of how these gains are distributed, who are the losers, and how if at all they are compensated is less clear.

In social redistribution terms India’s middle class would certainly gain from grocery retail liberalisation, seeing lower prices, whilst likely being in jobs that would not be threatened by such liberalisation. India’s middle-class women are increasingly entering the labour force, and would benefit from greater access to one-stop shopping at supermarkets. However the poor might lose. Despite also seeing lower prices (they buy less goods than the middle class), wages and job opportunities might shrink. About 40 million Indians work in the retail sector (2001). India’s farming sector would be forced to consolidate. Small inefficient farmers would go out of business as farm gate prices would be forced down; their land would be taken by fewre larger farms who could sell at reduced prices due to economies of scale. Many Indian rural labourers would become unemployed and likely have to move to the cities. India’s extensive class of retail middlemen would also lose out, as supermarkets arranged direct supply deals with the new large scale farmers.

Retail legislation

India presents a difficult regulatory environment for foreign supermarkets. Foreigners initially could not invest in retailing, unless in a single-brand store, when they could own up to 51% . This was relaxed, according to legislation passed on 24 November 2011, so that foreigners can now own 100% of single-brand retailers and up to 51% of multi-brand retailers such as supermarkets.

However there are further conditions (2011) on foreign supermarkets wanting to enter India. These supermarkets must invest £100 million in India, half of that to be spent on infrastructure. 30% of produce purchases must be from small and medium sized entreprises in India. Supermarkets will only be allowed to set up in cities with population over 1 million.

Even once in, retailers must overcome a thicket of regulations, and pay taxes to move goods out of some states, into others, or even within some states.

However in late 2011 political pressure from small shopkeepers and farmers once again forced the postponment of this opening up of the Indian retail market. Even if India’s national government ever implements these reforms, local politicians at State or City level could delay them.

Retail multiples

Indian domestic supermarket chains include Reliance and Bharti. Reliance, an indigenous Indian industrial conglomerate, has opened 600 stores between 2006 and 2008, selling groceries and fresh fruit and vegetables.

Aditya Birla, another Indian company, has 500 stores under the ‘More’ fascia.

Tesco, after failing to agree to a partnership with Bharti Enterprises, finally (after a decade of talks) managed, in 2008, to tie up an agreement with Tata. Tesco will act as wholesaler to Tata’s stores, and in a consultancy agreement will sell its retailing knowledge to Tata. Tesco’s sales in India in 2011 were £39 million.

In 2006 Bharti opted to partner with Wal Mart instead. Wal-Mart will operate 15 cash and carry stores jointly with Bharti; these stores will supply Bharti’s retail arm, Rajan.

Germany’s Metro Group entered India in 2003, and has two wholesale stores in Bangalore.

France’s Carrefour chain is trying to find an Indian partner, and planned to open four cash and carry stores by 2009. In fact Carrefour opened its first cash and carry store in India in January 2011.

Thailand Back to top

General retail economy

In 2002 six global retail chains – Ahold (Netherlands), Carrefour (France), Casino (France), Food Lion (Belgium), Makro (Netherlands), and Tesco (UK), were seeking to gain a foothold in Thailand.

Retail legislation

2007, the Thai government was considering passing legislation that would make it harder for foreign retailers to expand there. Proposals were for regional Thai governors to be able to make recommendations to a central agency (The Retail and Wholesale Supervision Committee) which in turn could accept or reject proposed new supermarkets; penalties for contravening this agency’s rulings would be 3 years in prison or fines of 3 million Baht (£46,000). Conditions in the Bangkok Hilton fall just a little short of those at Tesco’s head office in Cuffley, Hertfordshire.

Tesco has faced resistance to its expansion in Thailand since a military coup in the country in late 2006.

Independent retailers

2007, The Thai government claimed 100,000 small shops have been forced to close since 1997 due to the expansion of foreign supermarkets. Thailand was heavily reliant on traditional open-air street markets for groceries, and summer temperatures reached 30C. Shoppers liked the idea of air conditioned supermarkets, but small shopkeepers were not so keen.

Retail multiples

Carrefour

1999, Carrefour had 10 supermarkets in Thailand.

2010 Carrefour to quit Thailand

Tesco

1997, Tesco entered Thailand. It bought the 13-strong Lotus supermarket chain. By 2001 Tesco had 24 hypermarkets in Thailand.

2005/6, Tesco sales were £1,087 million; profits were £66 million.

2006, Tesco was market leader with 73 hypermarkets and 144 other stores in Thailand.

2011, Tesco had 782 stores, a market share of 12.6%, and sales were £2,800 million.

China Back to top

General retail economy

Development of supermarkets in China

China’s first supermarket, the Dongguan Friendship Store, opened in 1981 in the southern city of Dongguan (Globalisation and the Chinese Revolution, Yong Zhen, 2007). This store was for foreigners and only accepted foreign currency, not Yuan. The first supermarket chain in China, for Chinese customers, began also in Dongguan in 1990; it was called the Dongguan Meijia. China joined the World Trade Organisation (WTO) in 2001, and China’s economy has since rocketed – in its east-coast cities especially. Places like Beijing, Shanghai, and Hong Kong have seen major consumer booms, but in inland, western, China, the economy remains largely rural and poor. In 2010 only 1.4% of Chinese households earned over US$ 15,000 a year, and just 11% earned over US$ 5,000. Moreover,much of these earnings are saved, not spent in the shops, because outside the State sector, Chinese government pensions are paltry. However this means there is keen demand for low-priced shops like supermarkets. The Chinese Government, keen to avoid unrest, is attempting to keep a lid on inflation.

Foreign supermarkets accounted for 23% of the sales of the top 100 food retailers in China in 2006, although these top 100 account for a far smaller total share than the myriad of small shops and market stalls most Chinese still buy their foodstuffs from.

Stores like Wal-Mart are venturing further inland, not least to escape soaring rents and intensifying competition. Here, they may find interesting local purchasing preferences which they must cater to, to survive – a preference for extremely rough toilet paper in Zhejiang, or a liking for whole pig’s faces steamed, sliced, and dipped in sauce at the table in Shandong.

Supermarket numbers in China

China had 2,500 supermarkets in 1994. This number grew to 21,000 in 1998 and 40,500 in 2001. The share of retailing taken by supermarkets has grown from 0.18% in 1994 to 3.43% in 1998 and 8.2% in 2001.

Retail sales growth in China

Retail sales in China in 1992 were Yuan 1,000 billion. By 2003 China’s retail sales had grown to Yuan 4,580 billion (US$ 554 billion).

2010, retail sales in China were Yuan 7,000 billion (US$ 1,000 billion) – seven times the figure for 1992.

Retail legislation

In the 1980s almost all foreign companies operating in China were in manufacturing (Globalisation and the Chinese Revolution, Yong Zhen, 2007), and there were no regulations in place concerning foreign-owned retailing. Foreign companies whose investment in China exceeded US$ 30 million required the approval of the State Council, and the same law applied to foreign retailers. These foreign manufacturing companies were mainly from Hong Kong, Japan, and Singapore.

In 1992 the Chinese State Council issued specific regulations concerning foreign retailers, requiring approval from the Council no matter how big or small their investment in China. Foreign retailers were allowed only in the 11 principal cities of China, and each city could host no more than two foreign retailers. There were also rules on the foreign-goods content of sales by these retailers in China.

In 1997 China decreed that foreign retailers must partner with a Chinese enterprise, with the Chinese having a 51% share.

Throughout the 1990s and 2000s, local Chinese governments, in places like Shanghai, have tended to overstep their powers and be more liberal in allowing foreign retail investment than is strictly allowed by rules from Beijing.

Retail multiples

Auchan,

Entered China in 1999.

Carrefour

1995, Carrefour entered China

1999, Carrefour had 23 supermarkets in China

2001, Carrefour had 27 stores in 15 Chinese cities

2004, Carrefour had 49 supermarkets in China.

2007, Carrefour had 387 stores in China

2008, Carrefour became embroiled in the ‘Tibet independence question’ after a pro-Tibet protestor in Paris tried to snatch the Olympic Flame during its round the world tour before the Beijing Olympics, 2008. Pro-Chinese (anti-Tibet-independence) protestors shouted slogans against Carrefour and tried to dissuade customers from entering the store in various Chinese cities including Changsha, Fuzhou, Xian, and Shenyang (Eurofood, 14/5/2008, p.16). The Chinese government reiterated its support for Carrefour.

2008, Carrefour had 112 hypermarkets in China.

2011, 2.3% market share in China.

Jingkelong

A smaller supermarket chain in the Beijing region

Shanghai Bailan

China’s largest supermarket chain (State-owned), with 11% of the Chinese grocery market (2011). However they have very little presence beyond the Shanghai region

Tesco

Tesco entered China in 2004 by buying a share in the multiple Hymall.

By the end of 2004 Tesco had 29 supermarkets in north and east China, including 11 in Shanghai.

2006, Tesco had 39 stores in a joint venture with Ting Hsing.

In 2007 Tesco opened a store under the Tesco fascia in south-eastern Beijing. By 2007 Tesco also owned 90% of the Hymall chain, of 46 stores, all of which were re-fascia-ed as Tesco stores.

2008, Tesco opened its first ‘Express’ format store in China, in Shanghai.

2009. Tesco had 71 stores.

2011, Tesco had 105 stores, a market share of 2.9%, and sales were £1,100 million. 1.0% market share.

Wal-Mart

1992, Wal-Mart obtained permission to enter China. However it did not enter until 1996, after expensive market research was completed.

1996, Wal-Mart entered China

1999, Wal-Mart had 6 supermarkets in China

2004, Wal-Mart had 30 Chinese supermarkets

2011, Wal-Mart had 338 supermarkets, in 124 cities, with 90,000 employees. Annual sales in China were US$ 7,000 million – 3% of its sales in the USA. 3.6% market share in China.

Wu-Mart

Based in Beijing, Wu-Mart was founded by Zhang Wenzhong in the 1990s.

2010, Wu-Mart had 469 shops, and annual sales of 14,000 million Yuan (US$ 2,000 million)

Independent retailers

In 1992, China had 10 million retailers, employing 24 million people. The average of just 2.4 employees per shop indicates a highly fragmented retail sector, with many shops employing just 1 or 2 people. In 1997 China had 13.5 million small retailers, with a further 1 million supermarkets and 800 department stores.

Taiwan Back to top

Retail multiples

Carrefour

1989, Carrefour entered Taiwan

1999, Carrefour had 23 supermarkets in Taiwan

Tesco

2000, Tesco entered Taiwan, buying 1 store there.

2005, Tesco pulled out of Taiwan, having opened 4 stores there.

South Korea Back to top

General retail economy

A sharp recession in the 1990s followed years of rapid growth. This recession prompted the Korean Government to open up its retailing to foreign supermarkets.

Shinsegae is the main indigenous retailer

Retail legislation

1998, South Korea opened up its retail markets to foreign investors. Wal Mart was one of the first foreign retailers to enter the country. The rule that any supermarket development over 1,000 square metres required special planning permission was relaxed in 1997; new large stores thereafter only required registration.

However in 2012 South Jorea introduced specialised legislation aimed at curbing larger foreign supermarket chains from outcompeting local small stores. In cities, supermarkets were prohibited from opening within 1 kilometre of smaller stores, unless local community approval was given. Larger retailers faced opening-hours restrictions between midnight and 8am, again to protect smaller stores who cannot easily compete with such hours. Tesco’s boss in South Korea accused the South Korean Government of running a ‘water-melon’ policy on global competition – apparently ‘green’ on the outside, but in reality ‘red’ (i.e. protectionist) at heart.

Countries like Korea do not have full social security provisions to protect those who lose their jobs, so politicians are sensitive to the threat of job losses amongst small independent shopkeepers that might come if Tesco expands there. Tesco replied (2012) that it operated a franchise system whereby small shopkeepers could run Tesco local stores. But this won’t protect shopkeepers whose businesses close completely.

Independent retailers

Until the late 1990s South Korean retailing was dominated by small independent stores, there were no supermarkets.

Retail multiples

Carrefour

1999, Carrefour had 15 stores in South Korea

Tesco

1999, Tesco entered South Korea.

2005/6, Tesco sales were £2,133 million; profits were £129 million.

2006, Tesco has 55 stores, including 36 hypermarkets, in a joint venture with Samsung.

2011, Tesco had 354 stores, including 255 (August 2011) smaller urban stores, a market share of 4.4%, and sales were £5,000 million. By end-2011, Tesco had 299 smaller urban stores.

Wal-Mart

1998, Wal-Mart entered South Korea, buying 4 stores in the Seoul area from Makro. By end-1999, Wal-Mart had 5 stores in South Korea. Wal Mart exited South Korea in 2006, having lost a price war with incumbent retailers, who had the advantage of Korean purchaser patriotism.

Japan Back to top

General retail economy

In 2003 and 2004, both Tesco and Wal Mart entered the Japanese grocery retail market, see Part II of this site, ‘supermarket time lines and store numbers’ – Tesco, 7/2003 and 4/2004, and Wal Mart, 2004. Nevertheless, the Japanese way of life may not be so favourable to supermarkets as it is in Europe or North America. Japanese houses are much smaller, so the model of a large weekly or fortnightly supermarket shop may not work as many people would have nowhere to store all this food. Japan also has a rapidly ageing population, certainly more aged than in the USA; in 2020 34 million of its 127 million people will be aged 65 or over (Guardian, 1/6/04, p.15), and many Japanese women shop more traditionally, walking or cycling to a local mall of small shops several times a week.

Japanese housewives are often very thrifty, especially in the early years of marriage when total family earnings have not yet risen to their peak level, savings have not yet been built up, and there are children to raise. This thriftiness may work against supermarket penetration, because shoppers like to shop around for bargains, also for freshness, and like to visit many small shops to achieve this. However (Guardian, 1/6/04, p.15) in a popular magazine for young Japanese married women, Sutekina Okusan, it said that daily shopping may tempt people to spend more than they could afford on items they didn’t need, and the chance to go shopping just once a fortnight at a large supermarket might help cut out this temptation. Time will tell which viewpoint is right.

Retail legislation

Japan has a very restrictive regime on large shops. The Large Scale Retail Stores Law (LSRSL), enacted in 1973, required retailers to notify public officials of their intention to build any new store with a floor space of greater than 500 square metres. This has greatly hampered the expansion of the supermarkets (Kuwahara, 1997, p.112). Japanese retailing remains dominated by small stores. The LSRSL was relaxed in 1994 in response to the Heisei recession of 1990, when Japanese stocks and land prices fell sharply, but the recession has continued through into the 21^st century and Japan has seen no boom in supermarkets, despite further relaxation of the regulations in 2000.

Retail multiples

1960s, 70s Seiyu and Daiei were the leading multiple retailers in Japan. Daiei dominated the Kansai region (Osaka and Kobe). Seiyu was mainly in the Kanto region (Tokyo).

Aeon

The main food retailer in Japan, with (2011), some 8,000 stores.

Carrefour

2000, December, Carrefour entered Japan, becoming the first foreign retailer in that country

Tesco

2003, Tesco entered Japan.

2005/6, Tesco sales were £300 million; profits were £12 million.

2006, Tesco operated over 100 small-format stores in Japan.

2011, Tesco had 140 stores, a market share of 1.0%, and sales were 476 million. In 2011 Tesco exitted Japan.

Wal-Mart

3/2002, Wal-Mart entered Japan, buying a 6.1% share of the Seiyu retailer. This stake was progressively raised until by 12/2005 Wal-Mart owned a majority of Seiyu.

Malaysia Back to top

Retail multiples

Carrefour

1999, Carrefour had 6 supermarkets in Malaysia

2000, France’s Carrefour chain was the only major European retail multiple in Malaysia.

2010 Carrefour to quit Malaysia

Tesco

2000 Tesco announced plans to open 20 stores in Malaysia.

2005/6, Tesco sales were £151 million, losses were £1 million

2006, Tesco had 10 hypermarkets and three supermarkets in Malaysia.

2011, Tesco had 38 stores, a market share of 10.3%, and sales were £794 million.

Singapore Back to top

Retail multiples

Carrefour

1999, Carrefour had 1 supermarket in Singapore

2010 Carrefour to quit Singapore

Indonesia Back to top

Retail multiples

Carrefour

1999, Carrefour had 7 supermarkets in Indonesia

Philippines Back to top

Retail legislation

Foreign retail investors must meet a minimum equity level of US$ 7,500,000 if the operation is to be 100% foreign owned.

Australia Back to top

General retail economy

The retail grocery market is dominated by Woolworths and the Coles Group.

Retail multiples

Aldi

6/2004, Aldi had 70 stores in Australia

Egypt Back to top

Retail multiples

Sainsbury

Sainsbury set up a supermarket in Cairo in 1999, and by 2000 had expanded to seven supermarkets across Egypt, as well as an 80% holding in an Egyptian supermarket chain, Edge. However when the Palestinian ‘Intifada’(uprising) began across the border in Israel, Sainsbury was perceived as too pro-western by Egyptian customers and was forced to pull out of the country. Egyptian religious leaders had spoken out against Sainsbury for threatening the livelihood of small Egyptian shopkeepers.

Nigeria Back to top

General retail economy

2002, Nigeria had 102 supermarkets.

Uganda Back to top

General retail economy

2002, Uganda had 1 supermarket, and some smaller-format domestic chains.

Tanzania Back to top

General retail economy

2002, Tanzania had 4 supermarkets, as well as some smaller-format domestic chains.

Kenya Back to top

General retail economy

2003, Kenya had 206 supermarkets and 10 hypermarkets. Most of these were in the Nairobi area.

South Africa Back to top

General retail economy

2002, supermarkets accounted for 55% of total grocery retail sales.

2002, 4 multiples took 90% of the total supermarket sales. The Shoprite/Checkers chain and the PnP chain had 40% each; Spar and Woolworth had 5% each.

Retail multiples

Massmart

Massmart was set up in 1999, by entrepreneur Mark Lambert, as a hardware retailer, but has increasingly moved into the retail groceries sector, implying greater competition with Shoprite (see below). In 2010 WalMart bought a 51% stake in Massmart. In 2011 Massmart bought the Rhino retail chain, with its 16 |South African stores.

Shoprite

Shoprite / Checkers began with 8 stores in 1979. In the 1980s Shoprite consisted of ‘a few tatty stores in Cape Town (Economist, 15/1/2005, p.64). Its first venture outside South Africa was to take over a French-owned chain in Madagascar, and to open a store in Mauritius.

In 2002 Shoprite / Checkers consisted of 294 Shoprite supermarkets, 19 Checkers hypermarkets, and 41 fast food outlets, as well as furniture stores and financial services sales outlets.

In 2005, Shoprite also had stores in Botswana, Egypt, Lesotho, Madagascar, Malawi, Mozambique, Namibia, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe, (the latter doing badly because of the economic slump under the Mugabe regime). It plans to enter Angola and the Democratic Republic of the Congo.

In December 2004 Shoprite opened a large store in Mumbai, India.

Shoprite, January 2005, was the biggest supermarket in Africa.

Shoprite positions itself at the lower end of the market, adopting a ‘pile it high and sell it cheap’ strategy.

Shoprite (2005) had 700 stores in 16 countries, and 63,000 employees.

Canada Back to top

Retail multiples

Wal-Mart

1994, Wal-Mart bought the Canadian chain Woolco, acquiring 122 stores.

1999, Wal-Mart had 166 stores in Canada

USA Back to top

General retail economy

Total size of US grocery market, 2005, US$ 600 billion. Retail concentration; in 1980 33 supermarkets account5ed for 20% of US retail sales; in 2005 just 7 supermarkets accounted for 20% of US retail sales. In 2002, supermarkets had an overall share of 70% of grocery retailing.

2006, top 10 US grocery chains (source, ‘Tescopoly’, A Simms, 2007, p.58)

1) Wal-Mart, 2,089 stores

2) Kroger, 2,501 stores

3) Alberstons, 1,765 stores

4) Safeways, 1,540 stores

5) Ahold, 824 stores,

6) Publix, 876 stores

7) Dalhaize, 1,544 stores

8) H E Butt, 272 stores

9) Supervalu, 619 stores

10) Winn-Dixie, 563 stores

Retail multiples

7/11

2005, 7/11 had 5,305 stores, turnover was US$ 7,200 million

Aldi

1976, Aldi opened its first store in the USA, in Iowa

2005, Aldi has 800 stores in the USA, across 25 states.

2005, Aldi was expanding in southeast Michigan, opening shops in impoverished Detroit, an area abandoned by many grocery retailers.

2007, Aldi had 800 stores in the USA.

Carrefour

1988, Carrefour entered the USA. After suffering losses of US$ 80 million, and failing to gain enough retail capacity to compete, Carrefour sold its 2 hypermarkets in 1993, but kept a stake in Costco.

Tesco,

2007, Tesco entered the USA, under the ‘Fresh and Easy’ fascia; the first of these was in California. However this was just before the Credit Crunch hit the USA, and then the rest of the world, severely curtailing consumers’ willingness to spend.

Year	No. of stores	Losses (£million)	Sales (£ million)	Sales space (million sq m)
2007/8	53	62	16	0.053
2008/9	126	142	206	0.12
2009/10	145	165	349	0.15
2010/11	164	186
2011/12		153

Wal-Mart (See also Asda)

1945, Mr Sam Walton began his career in retailing when he opened a variety store in Newport, Arkansas.

1950 Sam Walton purchased Harrison’s Variety Store in Bentonville, Arkansas. He renamed the Harrison’s store as ‘Walton’s 5 & 10’, and branded the store on low prices and value for money.

1962 Sam Walton and his brother James opened the first Wal-Mart store in Rogers, Arkansas.

2006, Wal-Mart announced a 26% drop in 2^nd quarter year-on-year earnings to US$2,080 million, (UK£ 1,100million), largely due to a US$ 863 million write off consequent on its exit from Germany Its 85 German stores were sold to Metro, who will add them to its existing chain of 288 ‘Real’ stores. Wal-Mart blamed strict German labour laws, and very limited shopping hours (short weekdays, no Sunday shopping at all; the German Ladenschlussgesetz) making it hard to operate its ‘high volume-low-cost business model’ and weak consumer sentiment in Germany.

There was ‘fierce competition’ from three incumbent discounters; Lidl, Aldi, and Kaufland. As a result, Wal-Mart failed to reach ‘critical mass; its German operations never really gained enough economies of scale to compete with the incumbent stores.

However Wal-Mart also made its own errors. It had a boss of the German operations who spoke no German (and insisted his managers also worked in English), followed by a boss who ran the German operations from England. Wal-Mart’s German supply infrastructure was fragmented and costly, and it had too few German stores to achieve worthwhile economies of scale. Wal-Mart also failed to anticipate the German consumer’s preference for choosing their own goods, un-molested by cheery shop assistants at their elbows. Wal-Mart also mis-matched products to the German market; for example American pillowcases as stocked by Wal-Mart did not fit German pillows.

(Global Marketing, Svend Hollensen, 2011)

2006 Wal-Mart market share, USA, 28.8%

2009 Wal-Mart began selling coffins in the USA; undercutting the independent undertakers. They don’t (yet) do burials or cremations, but this is one step closer to the time when a person could live their entire life within a supermarket.

Wal Mart statistics

Year – reporting date 31 January	No of stores worldwide	Sales (US$ million)	Profits (US$ million)	employees
1970	32	31
1979		1,248
1989/90		20,000
1990/1	1,531	34,000
1991/2		43,900	1,609
1992/3		52,000
1993/4		67,347	2,333
1994/5		80,000
1995/6		93,627	2,740
1996/7	2,700	103,000
1997/8		111,958	3,526
1998/9		137,000	5,377
1999/00	3,600	165,013
2000/1		191,329	6,295
2001/2	4,000	245,000		1,300,000
2002/3		256,000	9,100
2003/4		285,200
2004/5	5,000	305,000
2005/6	6,600	312,000		1,800,000
2006/7		345,000	12,100
2007/8	6,900	351,000	12,900	1,900,000
2010		405,000	14,500
2011		421,000	15,400
Year – reporting date 31 January	No of stores worldwide	Sales (US$ million)	Profits (US$ million)	employees

International expansion

1991, Wal-Mart entered Mexico, partnering with a local store chain called Cifra, to open a Sam’s Club store in Mexico City.

1992, Wal-Mart entered Puerto Rico. In 1999 Wal-Mart had 15 stores in Puerto Rico

1994, Wal-Mart entered Canada, purchasing 122 Woolco stores.

1995 Wal-Mart entered Brazil, partnering with Los Americanos.

1995, Wal-Mart entered Argentina

1996, Wal-Mart entered China, opening a store in Shenzhen. By 2004 Wal-Mart had 38 stores in China, and in 2004 opened its 39^th store in the south-western city of Guiyang. Wal-Mart opened its 40^th store in China in November 2004 in Wuhan. In 2006 Wal-Mart had 60 stores in China.

1997, Wal-Mart entered Germany, buying an upmarket chain, Wertkauf, and another chain, Inter-spar. See 2006 for reasons for exit from Germany.

1999 Wal-Mart took over Asda with its 229 UK stores.

1999, Wal-Mart entered South Korea

2004 Wal-Mart opened its first superstore in Japan, in Numazu, a seaside town south west of Tokyo

2006 Wal Mart exited from South Korea where it had 16 stores.

2006 Wal Mart exited from Germany.

2010 WalMart announced it would bid for MassMart, South Africa’s largest retailer, with its 290 stores. Johannesburg-based Massmart also has stores in 12 other Sub-Saharan countries, including Ghana, Nigeria, Tanzania and Zimbabwe. This would be the first major entry of a Western supermarket into the Sub-Saharan African market.

Whole Foods

Began in Austin, Texas, in 1980, as the ‘Saferway’ vegetarian shop

1988 Saferway became Whole Foods when it acquired a new Orleans natural foods store also called Whole Food. Further acquisitions by Whole Foods followed.

2004 Bought the UK chain Fresh and Wild – see ‘UK supermarkets and timelines’.

2007, Whole Foods has 195 stores, with annual sales of US$ 5.6 billion (UK£ 2.8 billion).

2008, Whole Foods made an operating loss of £36million in the 12 months to 30 September 2008, as against a loss of £9.9m for 2006/7 (Guardian 4/8/90. This is against a background of the Credit Crunch.

Mexico Back to top

Retail multiples

Carrefour

1999, Carrefour had 17 stores in Mexico

Wal-Mart

1991, Wal-Mart opened a Sam’s Club supermarket in Mexico City.

Further expansion in Mexico was delayed by the Mexican economic crisis.

1998, Wal-Mart acquired a majority stake in Cifra.

1999, Wal-Mart had 458 stores in Mexico, and a 53% stake in Cifra.

2000, Cifra changed its name to Walmex (Wal-Mart de Mexico)

2001, Walmex sales in Mexico were US$ 9,700 million

Guatemala Back to top

General retail economy

In 2002, supermarkets accounted for 35% of retail grocery sales, up from 15% in 1994 and 25% in 1997.

Retail multiples

La Fragua

has 46% of the supermarket share in Guatemala, under a variety of fascias including Supermercados Paiz and HiperPaiz.

Honduras Back to top

General retail economy

2002, supermarkets accounted for 43% of retail grocery sales, up from 25% in 1997.

El Salvador Back to top

General retail economy

In 2002, 2 chains, Superselectos and La Fragua, each had 55 supermarkets, plus smaller-format outlets. Overall (2002) supermarkets accounted for 37% of retail grocery sales, up from 34% in 1997.

Nicaragua Back to top

General retail economy

2002, supermarkets accounted for 19% of retail grocery sales, up from 10% in 1997.

Costa Rica Back to top

Retail multiples

Megasuper

The Megasuper chain has 15% market share (2002). Overall, supermarkets accounted for 50% of retail grocery sales in 2002, up from 45% in 1997.

Colombia Back to top

General retail economy

2002, supermarkets accounted for 36% of retail grocery sales.

Retail multiples

Carrefour

1999, Carrefour had 2 supermarkets in Colombia

Venezuela Back to top

2001 Venezuela’s first hypermarket, Tiendas Exito,opened. It was a Colombian-French-Venezuelan joint venture. It was expected to attract bargain-hunters in Venezuela’s recessionary economy.

Brazil Back to top

Retail legislation

Some restrictions on edge of town supermarket developments but fairly easy to gain planning permission.

Retail multiples

Brompreco(Ahold)

1999, Market share = 6.0%

Carrefour

1975, Carrefour entered Brazil, buying Ultracenter in Sao Paulo state. Carrefour was the first foreign retailer to enter Brazil.

1999, Carrefour had 193 stores in Brazil generating sales of US$ 4.3 billion; market share = 18.0%.

Pao de Agucar(Casino)

A consortium of five retailers, serving mainly an upmarket customer base.

1999, Pao de Agucar had 285 stores, and annual sales of US$ 3.7 billion; market share = 15.0%.

Sendas

Begun by a Portuguese migrant in the 1920s in Rio de Janiero.

1995, Sendas had 40 supermarkets in Brazil.

1999, Sendas had 73 supermarkets and annual sales of US$ 1.1 billion

Wal-Mart

1995, Wal-Mart entered Brazil. It set up a Sam’s Club outlet in 1995 in Sao Caetano, a less-affluent area near Rio de Janeiro.

1999, Wal-Mart had 14 supermarkets in Brazil

2009, Wal-Mart had 348 stores in Brazil

2010, Wal-Mart had 487 stores in Brazil

Chile Back to top

Retail multiples

Carrefour

1999, Carrefour had 2 supermarkets in Chile

Argentina Back to top

General retail economy

In 2000, supermarkets accounted for 57% of retail grocery sales, up from 36% in 1992.

Cencosud is the main indigenous retailer (2010)

Retail multiples

Disco(Ahold)

1999, market share = 17.0%

Carrefour

1982, Carrefour entered Argentina

1999, Carrefour had 300 stores in Argentina; market share = 28.0%.

12/2007, Carrefour had 557 stores in Argentina

Wal-Mart

1999, Wal-Mart had 13 supermarkets in Argentina