Wal-Mart resignation throws further light on competitive Russian retail market
Published: 18 November, 2009, 12:22
Edited: 30 October, 2010, 18:53
TAGS: Retail, Russia and the global economy, Big deal, Economy
The reported resignation of Stephan Fanderl, head the of Moscow office of Wal-Mart, comes just days after French retail chain Carrefour announced it was pulling out of its attempts to break into the Russian retail market
Fanderl was engaged in early 2008 to spearhead the worlds largest retailer’s push into Russia, but is believed to have resigned after no progress was made. The company says it is still exploring business opportunities in Russia.
Business RT spoke with Art Vartanian, CEO at Retail Solutions, about the problems of global retailers making their presence felt in Russia’s retail market.
RT: Wal-Mart wanted to enter the Russian market through the existing retailers. Why did they fail?
AV: “For a while they were talking to X5, which never made any sense to me, as their shops, like Pyaterochka, for example, are too small, it’s not their format. Later they talked to Lenta stores in St. Petersburg, which made much more sense, because Lenta has a bigger format, it’s more comfortable and they could be a little more forward thinking and they sell different merchandise. But they didn’t make a deal with Lenta, because the valuation was too high. They were asking for pre crisis prices when the crisis had already started.”
RT: What are the major difficulties for foreign retail chains when entering the market?
AV: "To some degree it, of course, depends on the retailer. In some cases retailers could have better opportunities, like Carrefour and Wal-Mart in South America and China, and Mexico, which are big and closer markets. As for Russia, everybody knows it doesn’t rate very high in terms of business transparency. That’s another reason.”
RT: What advantages do existing retailers in Russia have over the newcomers?
AV: “There is “the first market mover advantage” for the existing chains, like Auchan, for example. If you are already here, there’s definitely the advantage, as you have better opportunity to build more stores, to get better space, etc.”
RT: Are there any advantages, for Russian consumers, of the global retailers coming into the market?
AV: “Nothing really important, as far as for a consumer. What’s really important, is that new western retailers could improve retail expertise, retail prices and thus boost competition in the market."
18.11.2009, 10:07
Nord Stream to start on timeThe head of Nord Stream, says construction will start as planned, on April 1 2010, despite reports of further delays, with project partners warning of difficulties raising $12 billion dollar they need to finance it. |
18.11.2009, 20:48
Russian car buyers drop gear to go down marketThe Russian car market has been hammered by the economic downturn with sales halving over this year, as credit almost disappeared. That has locals looking for cheaper options and carmakers going down market too. |
I disagree with these comments. Lets start with McDonalds. Easy to bash McDonalds, though if so damaging, why are all the McDonalds in Russia always so full of customers of all types, ages, and backgrounds? Puskin location has 24 cash registers! Incidently, they pay 100% taxes, no bribes, and white salaries unlike many other companies and people trying to do business in Russia. Regarding Wal-Mart, one would need to write a dissertation to address all the unsubstantiated accusations put forth. Knowing the country and having a number of contacts that live and work in Russia (foreigners and Russians), I can say that many underemployed people would line up to have a chance to work for Wal-Mart, not to mention customers obviously love the offer. These companies dont get this big and successful by being "Pure Evil". By the way the American economy did implode... and so did Ukraine, Greece, Spain, Ireland, Portugal, Ukraine, Italy, Iceland and Russia. So take your pick, open up the market place and accept change, or put up the walls and the only ones that benefit are the oligarches and companies that will keep the status quo run their mediocre, poor service businesses.
Wal-Mart entering Russia will be more damaging than MacDonald's. They are a multi billion a year establishment anti-union, anti-worker rights, anti-competition, anti domestic products. All they are after is money and are cut throat about making that money. Any employee knows their evil deeds. One employee was denied insurance when they needed it the most through their Wal Mart health care. They cut salaries and pay minimum amount possible. They pure EVIL! This is good news and Wal Mart should be viciously fought by all Russians from entering Russia. Unless they want to go the way of America and just be brain dead consumers who live off of debt until the economy implodes.
Nothing would damage the Russian people more than to allow a company like Walmart take over the retail sector in Russia. All the charm that makes Russia so wonderful along with Russia's precious tradition's would be lost forever . Just picture all the Kiosks gone, all the little mom and pop businesses that employ tens of thousands of people , gone forever! The open air markets, fruit stands and even souvenir shops would be gobbled up by the insatiable Evil monster that Walmart is. Walmart is a corporate dictatorship that underpays and abuses its' workers, the people are spied on, told how to vote, made to work without pay and suffer unspeakable indignities at the hands of unscrupulous Nazi-like "bosses". Walmart is the standard bearer of the movemnt to destroy all the progress of the workers of the last 100 years. Left unchecked Walmart will throw humanity back to the dark ages of slavery and serfdom. Russia must resist the efforts of any business that operates this way to penetrate its' markets. Russia must, unlike America, elevate the status of its' workers and its' people as its' primary goal and never allow corporate greed to run amok as it has in America. The motto must be "the people first" and businesses, corporations and trade agreements need to be controlled in such a way that they must SERVE not "OWN" the people as it is in America. In the long run goods consumed in a country should be made in that country or a country with the same income levels otherwise a lopsided unsustainable economy is the result. This is the lesson that the debt ridden, unemployed American people are now learning. They got their cheaper goods and now have no jobs plus enriched China which now builds up its' military and soon will be threatening the world with its' power.....power financed by the stupid uninformed American people and China's primary customer...WALMART!