The German publication LebensmittelZeitung reports that now that Wal-Mart has begun to release financial information about its German operations, it is becoming clearer exactly how challenging its operations in that country have become.
The report says that Wal-Mart has released sales figures on four of its 92 stores there, showing that last year those units alone lost the equivalent of $32 million (US) on sales of $404 million (US). According to the paper, Wal-Mart attributes the losses to "more intensive staffing and a 'higher level of service,' lower prices, more nonfood offers than competitors, 'expectedly big problems' with the implementation of Wal-Mart’s distribution system, 'exceptionally high investment' in the rebadging of stores, difficulties regarding the adaptation of the assortment and logistics systems."
The report says that Wal-Mart has released sales figures on four of its 92 stores there, showing that last year those units alone lost the equivalent of $32 million (US) on sales of $404 million (US). According to the paper, Wal-Mart attributes the losses to "more intensive staffing and a 'higher level of service,' lower prices, more nonfood offers than competitors, 'expectedly big problems' with the implementation of Wal-Mart’s distribution system, 'exceptionally high investment' in the rebadging of stores, difficulties regarding the adaptation of the assortment and logistics systems."
- KC's View:
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In other words, even Wal-Mart can't hit home runs all the time.
The thing that Wal-Mart has that a lot of other companies don't have is time and bench strength. It can devote the necessary resources to turning the German situation around, however long it takes.
And we suspect that it will.
