Walmart is the biggest grocery and retail store in the United States.
So, why doesn’t the company have any Supercenters in Europe?
Below, we tell you exactly why.
Why Aren’t There Any Walmarts in Europe?
There aren’t any Walmarts in Europe because Walmart failed to understand European culture and how European customers differ from American shoppers. European expansion also costs too much for the company to start anew in Europe. Plus, the price of real estate in Europe wasn’t worth it.
KEY TAKEAWAYS
- Walmart could not successfully understand European shopping culture or break European customers’ existing bonds with other stores.
- The cost of real estate in European suburbs made it difficult for Walmart to find cheap, vast land to build on.
- Walmart recently sold its majority stake in UK grocery store Asda, limiting its European expansion even more.
Below, we explain in key detail all the main reasons why Walmart did not successfully expand into Europe!
1. Walmart’s Failure to Understand European Culture
Many tout Walmart’s failure to completely understand European culture as the main reason why their attempts to open up grocery stores failed. Let’s take Walmart’s attempted expansion into Germany as an example.
German people often buy some grocery products locally, rather than at big supercenters. For example, they are much more inclined to buy their meat at their local butcher rather than at Walmart.
Walmart didn’t understand this — and didn’t end up successfully selling meat at their stores in Germany.
Walmart’s American culture is often pointed to as an example, as well. When you go to a Walmart in the United States, you are greeted at the door. There are people on the floor of the store to help you, as well as to check you out.
These Walmart workers work long hours. Their main goal, above all else, is to make as many sales as possible. In this way, Walmart’s culture is very American — and it did not translate well in Germany.
European shoppers are different, and many saw this as being too pushy and not at all authentic.
If Walmart executives had taken the time to do a better deep dive into European culture, they might have had a better time winning over customers in Germany and elsewhere.
But this isn’t the only reason why Walmart failed in Europe — and why there are no Walmarts in Europe today.
2. Start-Up Costs
Walmart was able to really kick off decades ago in the United States. They had the time to really build and conquer the market. As a result, they are still considered the place to go for cheap prices today.
In Europe, other grocery stores have done the same. These stores have managed to build brand awareness and trust with their customers. People will flock to the same grocery stores time and time again, just as they do in the United States.
So, for a new player to enter the field when there is already so much local competition — and clear winners? Walmart realized that it would take far too much money to get started and enter the race.
The company would need to manage to sell at much lower prices than their competitors — competitors that already have brand trust and awareness — and still somehow make a profit.
In Walmart’s eyes, this was impossible. There is a reason why the company never sought to really conquer Europe’s market, after all.
3. The Price and Location of Real Estate
The price and location of Walmart stores are also worth mentioning — especially because it’s a huge reason why there are no Walmarts in Europe. In the United States, Walmart has successfully bought cheap land in suburban areas to set up shops.
Walmart Supercenters are huge, so they needed as much land as they could get. As there are still large swaths of untouched American land to make this possible, Walmart has yet to have any major issues.
Europe, however, is a different issue. While Europe also still has buildable land, much of its land has already been built upon. Especially land in suburban areas near urban centers — the areas Walmart thrives in.
As a result, Walmart would have to find a large area in an already built area to set up its store. On average, this would cost a lot. Walmart has done so well in the United States because they have managed to buy cheap land whenever possible.
That simply isn’t as easily possible in many parts of Europe.
Prime, untouched areas where Walmart can build are often well away from the suburban areas they’re looking for. Nobody is going to drive an hour or more to go to Walmart. Not when they have other options already within their vicinity!
4. Walmart Does Own Asda
While you won’t find any Walmarts in Europe, this doesn’t necessarily mean that Walmart isn’t active, in some capacity, on the continent. After all, Walmart does own Asda, located in the UK!
Walmart bought Asda, a grocery store, in 1999. Walmart didn’t change anything about Asda. The stores existed much as they did before Walmart bought them and saved the company from bankruptcy.
Walmart did recently sell its majority stake in the company, though they do remain with a minority stake and a spot on the board! With this sale, however, Walmart could completely be stepping away from its small presence in Europe.
Conclusion
There are many reasons why there are no Walmarts in Europe. Walmart found that it was much harder to expand into Europe, thanks to the differences between European and American customers.
The price of start-up costs, as well as real estate, also helped Walmart realize that it would cost too much to really begin to even build a presence in Europe. As a result, the company hasn’t sought to expand fully into the continent anymore.