Walmart Food Coloring
Several news reports relayed stories of confused shoppers arriving at dark stores with locked doors, greeted by crying employees who were not alerted to the closures. If that sight wasn’t enough to turn shoppers off, there’s the issue of the prescriptions many had come to fill, not to mention the items waiting to be checked off their grocery lists.
The key difference between these two retail giants’ missteps is Walmart Food Coloring has 55 years of U.S. operating experience. Still, each chain could learn a few things from the other.
They didn’t put on shopper shoes (or schuhes).
Among Lidl’s recognized miscalculations, Gehrig said the chain failed to address American shopping preferences, such as for prepared foods. He also attributed the chain’s problems to poor locations and stores that are too big and expensive. It intends to roll back on experiments and store upgrades and limit its product range — it sells a lot of apparel and other nonfood items — to make the shopping trip simpler.
Walmart, in Germany, implemented a high-service/low-price business model in a market that did not appreciate the combination. Employees enthusiastically greeted shoppers at the door and offered help every 10 feet, which the unaccustomed Germans found annoying.
They should have made shoppers their lead motivation.
One possible reason for Lidl’s slip-up in the U.S. is it might have focused too much on what its top rival, Aldi, was up to instead of what its new shoppers expected. It ventured into the opposite direction of low-fringe Aldi, with large, higher-end stores that many U.S. shoppers found too complex for quick trips. Lidl also might not have paid close enough attention to what its future U.S. competitors were up to — many were lowering prices ahead of its entry.
Walmart similarly might have been concentrating too singularly on the wrong motivation when choosing to shutter 63 Sam’s Club locations, affecting 9,400 workers. Rather than considering the longer-term effects, the immediate closings would have on its customers — all of whom paid for Sam’s Club memberships (they will be refunded) — it appeared to have been concentrating on the bottom line. .
: Employee matters matter.
Lidl appears to understand what U.S. workers value, at least in terms of compensation. Store associates here earn a minimum of $12 an hour. Benefits, as detailed on its website, include medical, dental and vision insurance, a 401(k), life and disability insurance, an employee assistance program and time off for volunteering. However, the chain did replace its German head of U.S. operations in September after just three months, hinting at a “paramilitary” style of management that “wants to force success,” as described in Supermarket News. This could turn off potential talent.
While Walmart’s U.S. pay raises were applauded, they are now tethered to the bad mojo of the abrupt Sam’s Club closings. Walmart would have benefited from an advance warning, as Lidl provided with its reduced expansion plans. As for its employment experience in Germany, Walmart Food Coloring struggled to develop a good relationship with labor unions.