If you want a proxy for the global economy, look at Carrefour and Tesco, the European-based supermarket chains competing with Wal-Mart for world domination. Making direct comparisons between the two giants is difficult because each has had its own special problems. There is one area, however, where the misery seems to be shared: Mature markets.
Tesco, Britain’s biggest retailer, is having no fun in Japan and the United States, where it owns the Fresh & Easy stores. France’s Carrefour, the second largest retailer, behind Wal-Mart, is getting clobbered in Europe, especially in ailing Italy. Both have been stock market duds in the 12 months, though Tesco’s 9 per cent loss makes Carrefour’s 52 per cent fall look like a couple of broken eggs in the dairy aisle.
This week Tesco finally said Sayonara to its Japan business after about a decade of struggling to gain market share and post profits. It didn’t work. Tesco’s market share in the greater Tokyo area is half a percentage point or less and analysts estimate the business lost about £20-million ($32.3-million) last year. The highly competitive Japanese retailing scene has been a graveyard for foreign retailers for as long as anyone can remember and the stalled economy isn’t making things any easier for the few outsiders that remain. Carrefour was another company with great ambitions for Japan; it gave up in 2005.
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