That question came to mind recently when I discovered that a global food association that holds its annual event in different countries has chosen America as its location this year. That association is Paris-based CIES-The Food Business Forum, which represents food retailers in more than 50 countries. Its annual World Food Business Summit will be held in Atlanta this week (see story, Page 20), and many international retailers will be in attendance.
The question of whether U.S. food retailers will attempt to extend their businesses to other countries is one that arises periodically. It is a fitting inquiry for this issue of SN, which features our annual Global Retailing presentation and list of top world food retailers. Until now, with just a couple of exceptions, American supermarket companies have been content to operate within the borders of the U.S. But consolidation and increasing competition at home have led some to predict that, sooner or later, U.S.-based firms will look abroad.
One of those that has made the plunge is Bentonville, Ark.-based Wal-Mart. In the latest reflection of its international ambitions, Wal-Mart in March acquired a 6.1% stake in Japanese retailer Seiyu and has an option to acquire up to 66.7% of that company. Another U.S.-based company with an international focus is IGA, which now operates in 42 countries and logs almost 70% of its sales outside the U.S., with a growing commitment to Asia.
Given the intense global consolidation of recent years, there are fewer pickings for U.S. firms if they ever decide to seek retail acquisitions abroad. Moreover, American retailers have to determine if they have the skills or interest levels required to operate abroad. For an opinion, I turned to Thomas Haggai, IGA chairman and chief executive officer, who cited cultural factors in downplaying the likelihood of foreign forays by U.S. supermarkets. "When IGA expands into world markets, we enter with great respect for other cultures," Haggai said. "We don't say, 'Here's an American answer.' We become educated about the countries and develop the people in the stores and bring the best world strategies to our chain.
"The mind-set of our U.S. chain friends seems different. I don't get the feeling there is much international interest there. You can't expect to walk into the world and make money overnight. You need an unusual mind-set."
OK. So let's assume Haggai is right that most U.S. food retailers aren't packing their bags anytime soon. No problem. These retailers can still work to gain a better understanding of what motivates consumers in other countries. Why? Because America is so culturally diverse that some of those learnings will certainly provide beneficial insights into consumers here. If European consumers are more focused on the environment or genetically modified foods, for instance, it makes sense for U.S. retailers to pay attention lest they are caught off-guard by the same wave.
Perhaps the visit of foreign supermarket operators to Atlanta this week will spur U.S. executives to think more about retailing trends in other countries. That exercise might lead executives to out-of-the-box ideas that can be translated for an American audience. And at some point, this approach could even encourage some brave retailers to extend their enterprises beyond our national borders.