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Global retailers extend borders

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At a time of retrenchment in the U.S. retailing community, retailers in the rest of the world are expanding their horizons and aggressively reaching across continents for new growth ­opportunities.

MMR OpinionSo it is that one of Australia’s largest grocery retailers is exporting its home center unit to the United Kingdom, where, it believes, the opportunities for success are greater. Similarly, another leading Australian grocery retailer is searching globally for a new chief executive in the aftermath of a depressing performance in recent years.

Speaking of America, Lidl, a small-format grocery retailer that has made a splash in Germany, its home country, and across Europe, is coming to the U.S. to compete with Aldi — and all the home-grown American grocery retailers.

In Canada, Hudson Bay Co. has bought Saks Fifth Avenue and Lord & Taylor, two of the largest and most glamorous department store retailers. And the Weston family, proprietors of such retail icons as Loblaw and Selfridges, have just acquired Brown Thomas, a leading department store retailer in Ireland.

Contrast this aggressiveness with the recent announcement that Walmart plans to close its 100-unit small-format store chain, or that Walgreens is weighing the probability that it will have to close a significant share of the Rite Aid chain it is in the process of acquiring. Or that CVS will likely open fewer stores in 2016 than it has unveiled in the past. Or that Target is selling its pharmacies to CVS.

The list goes on. And it raises the obvious question: What’s wrong with U.S. retailing?

Has the industry grown too quickly or too recklessly? Has it run out of opportunities? Has it become too disdainful of the risks involved in dramatic growth or dynamic new directions? Or is global retailing simply catching up, as is so much of the global business community, after a period of dramatic expansion has put distance between American retailing and the global version?

No easy answer is available. Certainly, U.S. retailing has not taken significant advantage of global opportunities in recent years, claiming that opportunities outside the U.S. paled in comparison to those within the U.S. borders. Perhaps this assessment was incorrect or ­misguided.

Perhaps America’s view of the global retailing community is myopic or insufficiently anchored in reality. Clearly, some of the most successful retailers in the world do business outside the U.S., and have taken advantage of opportunities within the U.S. as they have become available. The reverse, however, mostly has not happened — and many American retailers have been content to pursue their fortunes within U.S. boundaries.

Clearly, this will have to change if U.S. retailing is to maintain its position as part of the global community. American retailers certainly have the strength and size to compete anywhere, with anyone. Companies like Walmart, Target, Walgreens, CVS, Kroger, Publix and several others are the equals of any foreign competitors. They can easily compete with homegrown retailers anywhere in the world; more of them should. In terms of personnel, our leaders have consistently proven the equal of their counterparts in other ­countries.

Our formats are equally innovative, our merchants equally creative, our ability to create new ideas and concepts equally breathtaking. Perhaps our focus is too narrow or too confining. Perhaps our vision is too limited or too old. Perhaps our objectives are too pedestrian or too ordinary. But the truth is, American retailers have lost much of the aggressiveness that propelled them to the top of their industry in years past.

What’s required? Nothing dramatic at the outset. Perhaps more U.S. retailers should make an investment offshore, test a concept that’s already working elsewhere, or appoint a foreign-born retail executive to a key position. Or perhaps do several of the above.

This much is certain: Much of the U.S. retailing community has embarked on a program designed not for growth or innovation but to protect what it has already achieved. That is not the way retailing has traditionally operated in the U.S. And it is not the way to the future.


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