There is very often a perverse sense of glee when a foreign entrant into a retail sector stumbles, or even falls entirely.
When a foreign retailer comes to the UK and attempts to show ‘us’ how it’s done, the schadenfreude is palpable when it balls it up.
I’m sensing a fair bit of this around Bunnings in the UK at the moment, as commentators (myself included, if I’m honest) pointing at corporate arrogance and a bit of tone-deafness as underlying reasons behind what looks like an impending retreat. Like Best Buy all over again.
It’s not just the Brits though. When Walmart was flailing around in Germany with its non-German management, borderline comedic decisions on ranging and uproariously insensitive decisions on working culture and practices, the German trade press – and broader business media – were loving it.
This was also the case for Fresh & Easy in the US. Post-mortems dripping with ‘I told you so’ and analysis with perfect 20:20 hindsight pointing out the mistakes made by Tesco in its attempt to break the American market.
“Assorted journalists and ‘experts’ are delightedly licking their pencils as they prepare to knock out the obituary for the latest failed attempt by a foreign retailer to crack the US grocery sector”
Contrary to popular belief, neither Sainsbury’s Shaw’s nor M&S’ Kings Food Markets were failures. They were both profitable and successful in their own right.
The decision of Sainsbury’s and M&S to jettison them was categorically a case of reprioritisation. There were more important things to worry about at home, so disposal was a way to focus on the bigger fish to fry – recovery in the UK.
Waiting to pounce
Lidl has now been trading in the US for around nine months and assorted journalists and ‘experts’ (who really should know better) are delightedly licking their pencils as they prepare to knock out the obituary for the latest failed attempt by a foreign retailer to crack the US grocery sector.
Sure, the entry has not been without some issues. The early stores are probably too big. The private label looked a little hurried to say the least, and availability was patchy at the start.
There have been problems educating Americans about the harsh realities of bringing your own bags and actually having to pack them yourselves. There has been some turbulence in terms of management.
Despite these problems, it is worth remembering a number of things. Firstly, Lidl has only ever failed in one country out of around 30 – that was Norway.
Secondly, Lidl is part of a privately-owned parent company with very deep pockets – a very different set of KPIs to other retailers and much greater patience than listed competitors.
Thirdly, Lidl is one of the most adaptable and nimble retailers around. Ostensibly, its stores all look the same around the world but, dig a little deeper, and you’ll find a business with incredible powers of adaptation, localisation and reinvention.
It’s worth remembering that it took Lidl around 15 years to become an ‘overnight’ success in the UK. I look forward to checking in with the US ‘experts’ in 2033 to see how Lidl’s failure there is coming along.