Syt's Pictorial Collection of Stuff and Things (image heavy)

[Josquius]

Fucking hell, expecting the British planning system to open up... These out of town shopping centres are already screwing us enough.

[Richard Hakluyt]

@Sheilbh - I think the problem for the trams may have been the increasing proportion of the population living in the suburbs. So the City of Preston has only 115k people, but the "Preston Built-Up area" has 315k. The network shown on the map would only serve about a quarter of that population; in addition the people further out are at lower population densities.

I would quite like it of course, as one of the termini is 50 yards from my house and I could be whisked about what I consider to be the interesting parts of the town at speed 

[Syt]

In the 90s, Walmart tried their luck in Germany and gave up less than 10 years later. For one, their corporate culture (always be smiling, group calesthenics, ...) wasn't accepted. Their ethics rules (e.g. not being allowed to date fellow employees) was also debated at the time, as it was questionable in its legality, further tainting the picture. It also didn't help that in the highly competitive German discount store market they wanted to break in by selling goods under cost - which is illegal per German law. In the end they never got beyond a 3% market share.

[Richard Hakluyt]

I have a memory of being cheerfully greeted on entering an Asda store back when we lived in Suffolk. The trauma meant we had to switch to Tesco's of course 

[Sheilbh]

I can't read the article but is it really a failed invasion or more of a factor that doing business in the UK simply isn't worth it. After all, before recently selling it, they were running what was typically either the #2 or #3 largest grocery store (which also has same Walmart setup of superstores with non-grocery items) in the UK.

Yeah I think it is failed but making a multi-billion dollar purchase in a region and then trying (and struggling to sell it) to get out of the market because it isn't worth it is surely a type of failure too. Plus I think that's sort of true of all non-US markets for a lot of big US companies, I'm always surprised by this but in a previous job I remember hearing that Pepsi earn half their revenue in the US and even now when Walmart have very successful Asian brands, they still get 75% of their revenue in the US. They bought Asda over 20 years ago and made a real go of it - that was meant to be part of their ongoing European expansion in the 90s (I think they were also focusing on Germany) and European supermarket shares crashed the day it came out that Walmart were moving in.

The big issues that article noted was that while Asda was a really good brand fit, they have generally been one of the most affected by the competition from the German retailers which weren't expected in the late 90s - but basically the Asda brand was "we're the cheapest" and when Lidl and Aldi arrived that wasn't true anymore and they didn't really have as much of a brand identity as the other supermarkets. But also that basically Walmart/Asda were very committed to the big box out of town store, while Sainsbury's/Tesco etc pivoted to mini-stores in towns and cities like Tesco Metro and Tesco Express - and apparently these new convenience stores have been a big earner for those brands. Part of this was also that the competition regulator stopped Asda from buying Safeway (which was eventually bought by Morrisons). I also think that the UK retailers were ahead of the US on moving online, so Walmart in the US learned a lot from their UK operations but were behind initially.

I think they've generally given up on Europe because it's been more difficult than expected. But they've been trying to sell their stake in Asda for years and not able to find a buyer.

[Sheilbh]

In the 90s, Walmart tried their luck in Germany and gave up less than 10 years later. For one, their corporate culture (always be smiling, group calesthenics, ...) wasn't accepted. Their ethics rules (e.g. not being allowed to date fellow employees) was also debated at the time, as it was questionable in its legality, further tainting the picture. It also didn't help that in the highly competitive German discount store market they wanted to break in by selling goods under cost - which is illegal per German law. In the end they never got beyond a 3% market share.

Yeah apparently they tried to introduce I think they're called greeters in the UK but they were received with shock, incredulity and occasionally hostility in the UK 

[garbon]

Yeah I think it is failed but making a multi-billion dollar purchase in a region and then trying (and struggling to sell it) to get out of the market because it isn't worth it is surely a type of failure too. Plus I think that's sort of true of all non-US markets for a lot of big US companies, I'm always surprised by this but in a previous job I remember hearing that Pepsi earn half their revenue in the US and even now when Walmart have very successful Asian brands, they still get 75% of their revenue in the US. They bought Asda over 20 years ago and made a real go of it - that was meant to be part of their ongoing European expansion in the 90s (I think they were also focusing on Germany) and European supermarket shares crashed the day it came out that Walmart were moving in.

The big issues that article noted was that while Asda was a really good brand fit, they have generally been one of the most affected by the competition from the German retailers which weren't expected in the late 90s - but basically the Asda brand was "we're the cheapest" and when Lidl and Aldi arrived that wasn't true anymore and they didn't really have as much of a brand identity as the other supermarkets. But also that basically Walmart/Asda were very committed to the big box out of town store, while Sainsbury's/Tesco etc pivoted to mini-stores in towns and cities like Tesco Metro and Tesco Express - and apparently these new convenience stores have been a big earner for those brands. Part of this was also that the competition regulator stopped Asda from buying Safeway (which was eventually bought by Morrisons). I also think that the UK retailers were ahead of the US on moving online, so Walmart in the US learned a lot from their UK operations but were behind initially.

I think they've generally given up on Europe because it's been more difficult than expected. But they've been trying to sell their stake in Asda for years and not able to find a buyer.

Got it. However, I think you've glided a little past my point which that I think it also shows that UK just isn't worth it. If being the #2/#3 chain isn't reason enough to stay on, it suggest there can be deeper issues in the UK supermarket sector (which we know there are). That's a bit different from say Syt's comments on Germany where they struggled to gain market share.

[Sheilbh]

Got it. However, I think you've glided a little past my point which that I think it also shows that UK just isn't worth it. If being the #2/#3 chain isn't reason enough to stay on, it suggest there can be deeper issues in the UK supermarket sector (which we know there are). That's a bit different from say Syt's comments on Germany where they struggled to gain market share.

Yeah. On market share, from the FT piece I think Asda were at about 15% of market share when they came in and are still at 15% 20 years on. Basically they got squeezed by the looks of it so to begin with Tesco went from about 20% to about 33% market share then the discounters came in and now have 15% market share too.

It's not the first story I've read of supermarket brands really struggling to move internationally - I know Tesco have (like Walmart) done well in Asia, but tried to launch brands in the US and just failed. I think it's really tough for that sort of retailer to expand internationallysomething about our cultural preferences and expectations in day-to-day shopping being quite fixed and difficult to export which seems really different than other sectors. It's a bit like when you go on holiday it's always fun to visit a local supermarket, but it's not really that different in any other type of retailer.

Out of interest what do you think are the deeper issues in the supermarket system?

[The Brain]

Weak gun section?

[Josquius]

@Sheilbh - I think the problem for the trams may have been the increasing proportion of the population living in the suburbs. So the City of Preston has only 115k people, but the "Preston Built-Up area" has 315k. The network shown on the map would only serve about a quarter of that population; in addition the people further out are at lower population densities.

I would quite like it of course, as one of the termini is 50 yards from my house and I could be whisked about what I consider to be the interesting parts of the town at speed 

You know, this sounds OK to me. Covering 1/4 of the 300k population takes a lot of cars off the road, especially around the centre where there's likely to be the most traffic.

[Sheilbh]

You know, this sounds OK to me. Covering 1/4 of the 300k population takes a lot of cars off the road, especially around the centre where there's likely to be the most traffic.

And you could always expand systems into Metroland (which was initially enabled by the trains anyway and only later became car-based). Or you have suburban rails which then link onto central tram systems.

[Grey Fox]

So Walmart's German experience is Target's Canadian experience.

Big US retail seem to think that they are coming into a empty market, announcing it years in advance.

[Richard Hakluyt]

You know, this sounds OK to me. Covering 1/4 of the 300k population takes a lot of cars off the road, especially around the centre where there's likely to be the most traffic.

And you could always expand systems into Metroland (which was initially enabled by the trains anyway and only later became car-based). Or you have suburban rails which then link onto central tram systems.

I think a major upgrade of the railway system might be best. There are so many towns quite near to each other, Blackpool is 12 miles to the west, Blackburn 10 miles to the east, Bolton about 20 miles south. Even Manchester and Liverpool are only about 30 miles away. If we lived at North American style density it would basically be one city of maybe 5m people. The traffic to get from one of these towns/cities to another is consequently enormous.

Unfortunately a lot of the railway lines are slow and overcrowded; not a winning combination. Preston to Liverpool takes an hour (or more) and they are only 27 miles apart.......that is disgraceful.

[HVC]

Note the derisive nature of the nicknames. It is curious that old women can buy their groceries on foot while young healthy men need to use a car 

Because old people can't drive without crashing so can't drive

[Richard Hakluyt]

Note the derisive nature of the nicknames. It is curious that old women can buy their groceries on foot while young healthy men need to use a car 

Because old people can't drive without crashing so can't drive

You'll be old one day too young feller-me-lad shakes stick