Welcome to the world of global retailing. I chose to call the text Retailing in the Global Environment rather than International Retailing because for the last 30 years, retailing has truly taken on a global perspective. So, what is the difference between being international versus global? In the case of some retailers who are in one or two countries, some companies have taken their companies around the world on many continents or are poised to do so. Additionally, the scope of many global retailers is larger than others. For example, some retailers are doing business in straight brick-and-mortar stores. One retailer that is still largely doing business utilizing this channel is Kroger, the U.S. grocery chain. As big as it is, ranked as the world’s fifth largest retailer in the world by sales volume in Deloitte’s Global Powers of Retailing 2021 (Deloitte Touche Tohmatsu Limited, 2021), it is much smaller in scope when compared to other retailers on this list such as Amazon, Schwarz Group (Lidl), Aldi Einkauf (Aldi), or Tesco. Indeed, some of the most successful global retailers have employed multiple channels to attract and retain customers. Take for example Apple, that uses traditional brick-and-mortar stores, an online store, and third-party retailers (Amazon, Verizon, Walmart, etc.) to sell its products. Another aspect of retailing that makes a company that does business beyond its home country is that it will have branches, offices, and/or distribution facilities that allow the retailer to supply its customers around the world with the products that they order. At the time of writing, Amazon had 28 country branches to facilitate getting products ordered through its marketplace into the hands of its customers around the world.

Throughout this text, I will highlight how many of the world’s largest retailers conduct business that has set them apart from their competitors. One of the companies that will be highlighted in several chapters is Walmart. Following the global delineation mentioned previously, Walmart was the first true global retailer. In a time when companies often sourced products from other countries to sell back in their home market, Walmart took it to the next level in 1991 when they decided to go into a joint venture with Mexico’s Grupo Cifra (Cifra). It was not long after that Walmart expanded into Puerto Rico, Canada, and China. So why is Walmart a good company to examine? Is it because they are the biggest and most successful of all retailers currently out there? As Amazon is now larger than Walmart in terms of overall sales volume, they are not the biggest retailer. Although not the largest retailer in overall sales volume, Walmart now has brick-and-mortar stores in over 33 countries on five continents, e-commerce websites in 10 countries, and has retail operations under 20 different company names in many countries including Vudu, Asda, and Seiyu Group to name a few. So although it may not be the largest retailer, is Walmart the most successful? Although no one can argue that Walmart is one of the most successful retailers in the world, that does not mean that it has always been successful. Even Walmart has failed in some of the countries it entered. Looking at why Walmart failed in a country can serve as an important lesson to those entering the retail field just as it is important to understand how it has become one of the most successful in the world.

Also, throughout this text two rather substantial events will be examined because both have had important, and in some cases, detrimental impacts to the world, individual countries, the retail industry, individual retailers, and retail customers. At the beginning of 2020, the world as we know it was turned upside down when the COVID pandemic hit. Some countries were hit harder than others both in terms of the number of people who died and in the businesses and economic hardship experienced by unknown millions of people who were not able to make it through the 2+ years when many countries kept their people confined except for essential activities. Some retailers that were strong pre-pandemic, succumbed as well as many, many others that had little cushion to survive the extremely long pandemic period, something never before experienced in modern history. Still other large retailers, especially those with a good online presence before COVID hit, actually thrived in the online-only environment in place. The other monumental event that will be discussed will be the war that Russia started with Ukraine at the beginning of 2022. Just when the world was showing some signs of coming out of the worst of the effects brought about by COVID, this war has caused a ripple around the world with historic inflation rates, supply chain disruptions, and a hesitancy on the part of retailers to expand during unsure and expensive times. In addition to causing death and almost widespread destruction of Ukraine infrastructure, this once promising retail country may never recover to pre-war times assuming it can drive Russia out. Russia has also suffered, not in terms of the destruction of infrastructure, buildings, and homes like it perpetrated on Ukraine, but it has suffered from an almost universal outcry by countries which have imposed sanctions on the country, with many retailers and other businesses from around the world pulling out either permanently or temporarily leaving the Russian economy reeling and Russians left without products and paying more for those products still available. This unprovoked attack by Russia on Ukraine will serve as an unfortunate example of something which can happen in the macro-environment that can spell disaster for a retailer.

Ever since traveling internationally for the first time and seeing U.S. brands in other countries, I have been interested in how retailers take their stores beyond their home. I have been fortunate to have taught this fascinating subject off and on for most of my higher education career where I have used my extensive traveling experience, my experience teaching in other countries, and my own retailing experience to supplement the formal education. For most of this time, I used other international retailing books which are limited in number. However, every year I taught I found that the other books put a lot of emphasis on theory and little on the practical process of taking a retailer internationally. That is not to say that theory should be ignored, and this textbook uses theory when applicable. However, if you are part of a retailing organization interested in expanding overseas to one or more countries, how do companies make all of the numerous decisions that must be made? This text guides the reader through the information gathering process called due diligence and the specific questions that are important to retailers depending on the type of entry mode strategy used to enter a country. Additionally, this text hopes the student will gain an understanding into what are the reasons that drive retailers to expand globally as well as the kinds of macro- and micro-environmental information that will be crucial to gather.

This text is also unique to international retail texts in that it will examine how countries are classified by their level of development by two well-respected global organizations: the World Bank and the United Nations. In addition to these classification schemas will be another developed by W. W. Rostow called modernization theory. Finally, the remaining chapters of the text will be broken into the regions and subregions of the world defined by the United Nations. Each of the subregions will begin with a table that lists the countries within the subregion, its population, the level of development, the country’s per capita gross national income (GNI), the World Bank’s Ease of Doing Business Ranking, a ranking of 190 countries that are ranked on several characteristics that determine how easy it is for an international business to establish operations, and lastly, the Kearney’s Global Retail Development Index, an index that ranks the 30 most important countries that should be considered for retail development with number 1 on the list being the most urgent for immediate consideration. For each of the subregions, the most important retailing aspects of the countries in each subregion will be outlined and depending on the World Bank’s Ease of Doing Business and the Kearney’s ranking for retail development, one or more will be described by their important macro- and microenvironmental aspects, general retailing industry, and the country’s largest retailers if they are listed on the 2021 Deloitte’s Top 100 global list of retailers.

Lastly, there will be a short conclusion about the trends that we are likely to see in the future, both in terms of regions and countries of the world that will be more important, the changes in the industry that we are likely to see happening as well as the up-and-coming companies that will become more powerful in both sales volume and in industry prominence. It is my hope that students will come away with a better idea about the global retailing industry as well as how to gather the necessary kinds of information that are necessary for a retailer to make strategic, financial, and commercially sound decisions with reduced risks.

~Deborah J. Colton

Reference

Deloitte Touche Tohmatsu Limited. (2021). Global powers of retailing 2021.