Local grocery oligopolies fight against global ones
Sweden
Sweden has the highest grocery food prices in Europe, dominated as it is by three major chains that are dedicated to selling at a profit. These are ICA (37% share), Kooperativa Foerbundet (18%) and Axford (17%). The lack of discounting is attracting foreign supermarket chains like moths to a flame.
The first one in the door are German chain Lidi and Danish chain Netto. In the planning stages are the UK's Tesco and Germany's Aldi. And Wal-Mart is right behind, much to everyone's dismay.
But according to an AFP story printed in the Taipei Times ("Supermarkets set sights on Swedish 'paradise'", 4/5/3004), the Swedish chains are finding ways to fight back.
Municipal authorities often delay or deny permission, citing concerns about increased traffic or nuisance for the neighbors in the case of larger malls, or concern for smaller, neighborhood shops… The Swedish incumbents, who have massive financial resources and can bide their time during a lengthy administration process, are refreshingly frank about what has made their lives comfortable.
The local rivals are united in wanting to slow down any new competition as long as they can.
Japan
Japanese supermarket leader Aeon has signed an agreement with rival Inageya to join operations in the Tokyo area. It will involve exchange of information and joint procurement of supplies. The reason: stiff competition from foreign rivals, most notably Wal-Mart. (Wall Street Journal, 4/12/04)
USA
In a related story, Wal-Mart lost an attempt to force itself into the town of Inglewood, California, just south of Los Angeles. In an end-run around the municipal government that had refused them, Wal-Mart demanded a popular vote on whether the company would be allowed to build one of its SuperCenters in that location. Despite a massive million-dollar promotional campaign from the chain, it lost to a 61% nay vote.
Wal-Mart has always faced local opposition in its expansion, but what it is seeing in California is quite something else. As a Wall Street Journal article puts it ("Wal-Mart Loses Supercenter Vote", 4/8/2004), "the fights it faces in California are tougher and have a different tenor. They are less about traffic congestion, suburban sprawl and the impact on local retailers than about Wal-Mart's low wages and employee benefits." Unions, fresh off a long and bitter supermarket strike, were major force in the defeat.
Wal-Mart still is pushing on to fill Southern California with SuperCenters, and is finding other, more amenable, towns. But it now is finding in the US the same kind of resistance it is seeing abroad.
