Sunday, May 21, 2006

Supermarket Battle: Wal Mart and Carrefour

A Catholicgauze Map. Click to Enlarge

We all know about Wal Mart. Love it, hate it, or both everyone in America and many around the world have an opinion about the 800 pound gorilla of the retail world. But how many of us know about Carrefour? I am sure many of my European readers do. I decided to do a simple investigation and I learned about marketing strategies, political influence on economics, and globalization.

Carrefour is the creation of French business partners who started the company in 1957 and is second only to Wal Mart in the retail business. Carrefour is the company which started the supermarket and hypermarket store style. It also made popular the idea of selling base food products at extremely low prices. The practice was known as produits libres or free products.

Wal Mart is America's, unknowing at the time, answer to Carrefour. Originally in the department store business Wal Mart has spread out and has managed to become America's largest grocery store with over 14% of all groceries being bought from it. To many Wal Mart has become the symbol of American capitalism; the only thing left undecided is whether that is a good or bad thing.

Spatial Distribution:
Wal Mart's primary core is North America. With nearly sixty percent of their 6,556 stores in the United States the business is centered in America. There has been recent expansion into Central American countries that are friendly to the United States. This has been profitable but controversial. The passage and NAFTA and CAFTA have allowed money to be easily transferred between these countries. Wal Mart has become an example of how interconnected the continent is.

Europe is Carrefour's core with a Wal Mart beachhead. France is Carrefour's home; nearly 50% of all global sales happen in the 3,704 French stores. Carrefour nucleus is the Romantic core of France, Belgium, Italy, Spain, and Portugal. New European Union and wannabes form the outer Europe region. Poland, Greece, Romania, and Turkey started having Carrefour stores in the early 1990s.

The Wal Mart hold can be found in the Germanic countries of the United Kingdom and Germany where there are no Carrefours to be found. These are weak links in Wal Mart's chain however. The United Kingdom the international leader of Wal Mart sales but done under the flag of ASDA. The German branch has not been very successful due to German labor laws and interference from governments making it hard to obtain building permits.

South America is a battle ground. Carrefour has had a presence since 1975 in Brazil but Wal Mart is trying to become the retailer of choice. Their problem though is geography. Countries on the eastern coast of South America tend to identify more with Europe than the United States. Europe is the place to send kids off to college and the place to vacation. The reserve is true for Central America and the western coast of South America.

Asia is the second battle ground. French ideals of internationalism seem to be the cause of their expansion into the area before a more isolationist America-based company did. However, Wal Mart is staging a coup. In 2002, Wal Mart allied with the powerful Seiyu Group in order to become an economic player in Japan. By 2005 all of Carrefour's Japanese stores were sold. Wal Mart is also making a play for the Chinese market; a sort of home coming for the company. The free reign that businesses have in China, while being under strict political controls, should make for an entertaining battle.

Interesting Notes on Globalization
Many of Carrefour and Wal Mart's international stores came in the early 1990s after the fall of communism. The fall and disgrace of international socialism became the dawn of the new age of globalization.

Leslie White once said that energy consumption was the best way to measure how advanced a culture was. In this globalized age; a way to measure how globalized a country is to see if they have big name international businesses (that's my idea; unless of course somebody else wrote about it before me, then it is their idea). Using the two retail stores it seems North America, Europe, most of South America, and most of the Asian rim are doing pretty good.

The areas not globalized are those areas discussed by me in the Arcs of Instability and Thomas Barnett's work. Africa, the Islamic world, and central Asia are all lacking the big names.

As mentioned before the attitudes towards the international scene have influenced expansion. France traditionally has been more cosmopolitan than the isolationist-prone United States. Carrefour has spread all throughout the world fairly evenly while Wal Mart has tended to focus expansion in its native North-West Hemispheres.

I personally wonder why Scandinavia is lacking a Wal Mart or Carrefour. Does strong socialism scare these companies away? Also lacking is Australia and New Zealand. These two countries are in the Anglo-sphere and prime ground for Wal Mart.

Category: Maps, Miscellaneous


Chirol said...

Why aren't they in North Europe? Because IKEA ownz Scandinavia!

Dan tdaxp said...

*ahem* perhaps you have enjoyed pictures of Walmart and Carrefoure in China?

Mick said...

Huge battle against the coming of Wal Mart in my town, (Guelph), its gone on for years now. Looks like WalMart has finally won, I guess we will soon see what Wal Mart brings. Mick