Former Wal-Mart director expects retail giant to target Australia

By James Wells in Maui

MAUI: Michael Bergdahl, a former director of human resources at Wal-Mart has told delegates at the Narta conference in Maui that the arrival of Wal-Mart is a case of not if, but when.

“There is speculation in the Australian press that Wal-Mart is considering an offer to buy Coles. I have predicted for some time that Wal-Mart would be coming down under and say g’day to everyone,” said Bergdahl, who has published two books on the second largest consumer electronics retailer in the world.

Bergdahl said that conversations with Narta delegates suggested that there was a philosophy that the $US321 billion multi-national retailer with 6,600 stores would not enter the Australian market due to the weak population density.

“When Sam Walton started the company in small-town America, it was when his competitors were opening stores in cities. He opened a 75,000 square feet stores in towns of 1,500 people or 2,000 people and drew people from 50 miles.

“Keep this in mind – Wal-Mart only had 14 stores in Germany and 80 stores in South Korea. There are over 100 Kmarts and 500 Coles grocery stores in Australia and New Zealand. It is not a question of whether they are going to come, it is when. And when they come it will be with a large presence.”

Bergdahl offered strategies to cope with competing in the big box world, particularly as he has previously predicted that Wal-Mart would eventually come to Australia and potentially New Zealand.

“If you are not a discounter, don’t try and be a discounter. Take care of your customer, control your expenses and do everything to serve your customer,” he said.

This year Wal-Mart will open over 500 new stores and in addition to this will also grow through acquisition.

Bergdahl estimates that 91 per cent of Wal-Mart customers have an income under $US100,000. By contrast, over 25 per cent of Best Buy customers earn over $US100,000.

According to the founder of the Clive Anthonys retail business, Clive Savage, there will be at least one retailer that will look forward to the arrival of Wal-Mart into the Australian market.

“The only retailer that will be happy about Wal-Mart coming to Australia is the one to be acquired,” Savage said.

 

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