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Unformatted text preview: September 19, 2003 PAGE ONE MEDIA & MARKETING NEWS Visit the Online Journal's Media & Marketing Edition 3 for the latest industry news. Sign up to receive a daily e-mail update 4 . Wal-Mart's Foray Into Japan Spurs A Retail Upheaval As Giant Confronts Barriers, Local Competitors Rush To Emulate Its Methods On Wal-Mart Stores Inc.'s newest battlefield, the obstacles are huge. Pricey real estate and cramped space make it tough to build big stores. An "everyday low price" strategy is befuddling shoppers accustomed to poring through newspaper ads for discounts. Traditions force retailers to go through layers of middlemen instead of buying directly from suppliers. And employees have even balked at Wal-Mart's "10 foot" rule, which encourages them to offer assistance to any customer within 10 feet. Here, grocery clerks usually wait for a customer to ask a question. By Ann Zimmerman in Dallas and Martin Fackler in Tokyo But Wal-Mart is making its first big push into the Japanese market. And its Japanese rivals are already trying to out-Wal-Mart the U.S. giant. They've slashed prices, built single-story supercenters with acres of parking, launched "Made in Japan" campaigns and made headway in breaking the stranglehold of middlemen over the supply chain. "Wal-Mart is taking its time to get ready. This is our chance to get a step ahead," says Kenichi Arai, spokesman for Aeon Co., Japan's second-largest supermarket chain, which has plans to open 30 supercenters in the next three years. The result has been a retail upheaval in Japan, where discount stores are still fairly new and long- protected mom-and-pop stores make up 58% of all retailers. The lower prices and broader selection are good news for Japanese consumers, who have suffered through a decade-long downturn while still paying some of the highest prices in the world. But the competition could also end up making it tougher for Wal-Mart to build a juggernaut in Japan, as rivals strip away Wal-Mart's advantages. Wal-Mart, which entered Japan 18 months ago by buying a stake in supermarket chain Seiyu Ltd., concedes local retailers are being quick and aggressive in mimicking the company's methods. But Wal- WSJ.com - Wal-Mart's Foray Into Japan Spurs A Retail Upheaval file:///E|/Newspaper Articles/Wall Street Journal/Wal-Mart's Foray Into Japan.htm (1 of 6)10/27/2008 5:19:35 PM WSJ.com - Wal-Mart's Foray Into Japan Spurs A Retail Upheaval Mart is sticking to its plan of approaching the market slowly, gradually remodeling Seiyu's 400 food and apparel stores in Wal-Mart's image. Wal-Mart executives say they don't want to turn off Japan's notoriously finicky consumers by rushing through the process. "We've been criticized for going too slowly," says John Menzer, chief executive of Wal-Mart's international division. "But we have to do it step by step. In three years, we'll be fully loaded." Despite its enormous success in the U.S., the Bentonville, Ark., discounter has sometimes stumbled overseas, especially when it acted too hastily. In Germany, Wal-especially when it acted too hastily....
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This note was uploaded on 10/18/2011 for the course BUSINESS Bus 302 taught by Professor Pendergast during the Winter '11 term at Cal Poly.
- Winter '11