Posts Tagged ‘Carrefour’

Could Wal-Mart have a demonstration effect?

April 8, 2009

The news this week is that Wal-Mart are reportedly back in the hunt for a Russian acquisition. They may be locked in a battle with Carrefour (the French world #2) and Metro (Germany, #4) for a controlling stake in a Russian hypermarket chain Lenta.

Currently not a single US retailer from the world’s largest 250 (according to Deloitte’s rankings) operate in Russia. This is despite more than 20 other large international players being there, including Metro, Rewe, Ikea, Inditex, and Boots (and despite the US making up 34.8 percent of the top 250).

wal-mart-lenta1It would seem that geographic and institutional differences are much larger between the US and its former cold war rival, than between Europe and Russia, and the US and Europe (and indeed the Middle East, Latin America and Asia for that matter).

It is fascinating that Wal-Mart are willing to take on the Russian challenge ahead of opportunities in the remainder of Western Europe. It would seem their format of big-box retailing has more prospects in emerging markets such as Russia, China and Latin America than the more developed world (as an aside, I wonder what that says about the relative economic development status of mid-West US in the 1970s-80s?) .

It will also be intriguing to see the extent to which Wal-Mart might act as a strong example to the laggard US retailers. Will this be a beach head for more entrants in this sector?

One final comment: Lentra does seem a good candidate for such an acquisition. Their format and growth seem comparable to a young Wal-Mart.