August 20, 2009

Wal-Mart Germany revisited

Walmart Germany (photo: Thomas Fedra)
Costly outing: Walmart's trip to Germany cost shareholders billions (photo: Thomas Fedra)
For years, marketers have been trying to convince journalists that 'retro' is the latest consumer fad. Still a recent cluster of comments on the website of our German online news service, LZnet, did surprise.

A number of readers reminisced about the good-old days when US retail behemoth Walmart, or Wal-Mart as it then was, strove to thrive on German soil.

In fact, Walmart's incongruous, and ultimately very costly, guest appearance in 'Old Europe' from 1997 to 2006 really does seem to have created a crowd of followers – at least in retrospect.

In the interests of free speech, this blog is happy to translate this fan mail below for our international readers. But may one dare to remind the romantics of what the Wal-Mart Germany fiasco was really like?

Fan mail for Walmart

Kathrin, a former employee, writes:

"I worked for Wal-Mart in Germany virtually from the beginning, and I still miss those wonderful days. At last we had some fresh (American) wind blow through German retailing. Sadly, Wal-Mart's strategic sales mentality never got started in this static, stagnant country of ours."

Manu pines for the shopping experience:

"The feeling when you shopped at Wal-Mart was simply great. Sadly we don't have a Wal-Mart in Berlin or anywhere else in Germany anymore. Please come back, our family needs you. I love Wal-Mart."

Oliver Kreimer writes:

"It would have been better if Wal-Mart had taken over 100 per cent of Metro Group because then we would have been able to buy better and cheaper than we can today in 2009 at 'real,' and other Metro stores.

Wal-Mart outlets always looked better than those of real,- and other competitors. Real,- wasn't a patch on them then or now, years after it took over Wal-Mart's German stores. Wal-Mart should have another go at buying Metro Group and reflag the 340 real,- stores in Germany to Asda, i.e., Wal-Mart UK.

This would represent a new chance for Wal-Mart to return to the German market. Wal-Mart could also buy the foreign hypermarkets of real,- in Poland, Russia, the Ukraine, Turkey and Romania, rebadge these to (Asda Wal-Mart) and thus become European market leader in the segment. Maybe this will happen."

Kevin agrees with one reservation:

"I too would be really pleased if Wal-Mart came back to Germany! However, I would prefer Wal-Mart to take over Rewe Group and to re-open the old Wal-Mart supercenters because I also like to shop at real,-, Metro C&C as well as the former Extra stores."

Costly foreign venture
These unanimously favourable opinions along the line "Yanks come back" are surely open to various interpretations. Perhaps, with the almost parallel demise of Marks & Spencer in Germany, this lament for a big-time failure also implies criticism of the choice provided by Germany's retail oligarchy (Edeka, Rewe, Metro and, formerly at least, Tengelmann).

After all, German retailers may be very fond of citing the business saying "Konkurrenz belebt den Markt" (competition is good for the market), but they really don't seem to like it much when foreign competition does arrive in their own backyard.

The pro-Wal-Mart comments sent by our German readers inevitably also raise the question as to why the world's largest and richest retailer failed so miserably here in Germany.

One can only guess at the total net losses occurred by Wal-Mart in Germany. Any estimate has been complicated by changes in the way Wal-Mart reports the goodwill amortization of its international operations.

However, they certainly paid over the odds to enter the market, incurred at least €3.2bn ($4.6bn) in operational losses, never made an annual profit in nine years, and exited at high cost. Shareholders on Wall Street must have been delighted.

The Original Logic

In view of the vast potential which still existed at the time in the USA, it was perhaps surprising that Walmart decided to go international in the early 1990s.

Expansion into Mexico and Canada, however, can at least be explained as moves into border countries where Walmart had the option of falling back on its own distribution centres in the north and south of the Union, where necessary.

One could also make out a case for its expansion into Brazil and China. After all, they represent bold moves into vast and dynamic threshold economies with, certainly as far as China is concerned, relatively insignificant modern retail competition.

Former chief of international operations, Bob Martin, put it to our newspaper like this:

“In the USA birth rates have declined continuously. The purchasing power of middle-class American households is increasing at only 1.7 per cent per year. Therefore we are interested in geopolitical areas outside the States which offer both higher birth rates and growth in consumer spending power.”

Carrying Coals to Newcastle
Germany, where birth rates are declining and consumption stagnating, is surely a different proposition.

Asked why Wal-Mart entered Germany’s saturated and highly-concentrated market, former Germany CEO Ron Tiarks told Lebensmittel Zeitung: “We decided to go for Germany because it is a large and stable market with high average income.”

Significantly, he didn’t mention either birth rates or consumption growth and made no reference to local competition.

In fact, Germany’s Top 4 food retailers dominate a market which is far more concentrated than the USA. So the purchase of any company outside Germany’s small oligopoly of partially family-owned retail groups could never have given Wal-Mart market leadership.

German retailing has long existed in a low-price environment so that today more than four out of every ten euros run through the tills of a hard discounter.

For decades, German consumers have been trained like Pavlov dogs to go for the lowest possible price and they are familiar with more KVIs than anywhere else in the world. So Wal-Mart’s low-price proposition was like carrying coals to Newcastle.

Overstored, concentrated & unionised
Germany is also overstored with far more shop footage per head than, for instance, France or the UK. Strict planning laws only allow a handful of new hypermarkets to be built per year on greenfield sites. Therefore, Wal-Mart’s original aim of opening 50 outlets within three years was totally unrealistic.

Organic growth was simply never an option, and market share can only be expanded via costly acquisitions – if you can find someone who wants to sell.

What else does even the most superficial glimpse at Germany tell us? Labour is highly litigious, unionised and works council-oriented; staff wages and incidental wage costs are among the highest in the world.

So, Wal-Mart should have been aware before increasing store personnel that it was entering a country where unit labour costs far exceed US ones.

Germany’s logistics and distribution systems were less sophisticated at the time than in the USA or the UK. Thus, scanner penetration, central distribution levels and average warehouse inventory turns were lower than in the States.

Thus, Wal-Mart’s much-vaunted systems had little to mesh with in Germany and couldn't run on their usual low-cost base.

Caveat emptor
In view of these glaring difficulties, the only justification for Wal-Mart entering Germany would have been an acquisition opportunity too good to refuse or a retail concept that could the market. Wal-Mart had neither.

In October 1997, Wal-Mart acquired Karlsruhe-based Wertkauf from the Hugo Mann family for an estimated €715m. This sum, which does not include the purchase of the sites themselves, was far in excess of anything that local German retailers were prepared to pay at the time.

The Wertkauf deal gave the Americans 21 hypermarkets in which the Manns had not invested for some time – presumably because they had seen no perspective for themselves as a small regional player.

In an attempt to gain critical mass, Wal-Mart outbid local rivals one year later in December 1998 for 74 Interspar hypermarkets from Germany’s crumbling Spar organisation for around €690m. On paper, this provided Wal-Mart with a combined store network of 95 outlets and annual sales of about €3bn.

But caveat emptor! It was not long before the many skeletons in the Interspar cupboard revealed themselves: minimal goodwill, poor management, and stores whose annual sales per square metre were only half of those estimated for Wertkauf.

At least half of them were of dubious quality and sited in minor provincial towns with bad car parks and too small catchment areas.

Despite the relatively small average store size, most of the outlets weren’t able to be extended due to planning regulations, required heavy modernisation investment and were on expensive rental contracts.

Pre-emptive strike
These two purchases did not go unnoticed by German retailers. After some initial, panic-inspired, blanket price cutting, they decided to stop damaging their already meagre gross margins and to contain the Americans by selective price cuts and pre-empt them on acquisitions.

So: Metro bought Allkauf and Kriegbaum; Edeka/AVA took majority control of Marktkauf; Edeka entered into a number of joint-ventures with Globus; and the Schwarz Group put its Kaufland subsidiary out of reach by reconstituting itself as a trust.

For a long time, Wal-Mart didn’t see that the door was being firmly slammed in its face, probably believing that money speaks all languages.

Instead of realising that German retailing is virtually a closed shop, where relationships of trust have to be nurtured over decades, if not even generations, Wal-Mart is said to have sent everyone a standard fax enquiry asking: “Are you for sale?”

Location, location, location
Having allowed the few remaining acquisition opportunities to slip through its fingers, Wal-Mart went for organic growth in Germany.

The announcement of its intention to develop 50 sites in three years, despite one of the strictest planning laws in Europe, only served to prove that US head office in Bentonville had lost touch with reality.

In the event, only a handful of stores were able to be built from scratch.

Even these sites were generally regarded as poor choices at the time. For example, the 11,000 m² (118,403 ft²) Pattensen store was too large for its catchment area and faced intense local competition.

Rents were high and traffic connections poor. Sales were said to be running 40 per cent below plan, and apparently Wal-Mart asked local authorities for permission to use its half-empty car park for purposes other than those originally applied for. At the Leipzig-Günthersdorf site unemployment in the catchment area was at 28 per cent.

One indirect consequence of not achieving successful organic growth was an obvious disinclination to reduce economies of scale further by closing the many loss-making former Interspar stores. Needless to say, this failure to take necessary action only increased losses.

Expensive Refits

Suffering daily from the poor quality of its acquisitions and feeble organic growth, Wal-Mart tried to increase sales productivity by a series of store refits. A start was made at Dortmund-Oespel in April 1998 and continued on a store-by-store basis at an estimated cost of €5m per outlet.

The most obvious changes observed at the Dortmund-Oespel branch were the doubling of floor space allotted to food and fresh produce, the reduction of such nonfood areas as household textiles, furniture or carpets, and the hiring of 15 per cent more staff.

These changes increased sales by an estimated 9 per cent, but reduced gross margin by around 5 per cent. In Germany’s hard discount culture, food is almost sold at cost price. So if you increase your food mix, you damage your overall margin.

But German wage and incidental wage costs of around 13.3 per cent of sales were far higher than anything Wal-Mart was used to in the USA. Extra staff certainly improved customer satisfaction.

However, despite Wal-Mart’s claims to the contrary, market research does not confirm that customer footfall grew in any profitable relation to increased personnel costs.

This was presumably due to the limited potential of the stores and their catchment areas on a generally extremely discount-oriented market.

Price Leadership on a Discount Market

True to its roots, Wal-Mart tried to gain price leadership in Germany in order to boost sales. The Americans therefore quickly introduced EDLP, but then proceeded to confuse customers with frequent special offers.

These so-called “Rollback” campaigns reduced prices on up to 1,200 lines by an average of 3 per cent for around 60 days and were advertised to as many as 10 million households on 20 colour pages.

Both EDLPs and Rollback prices were met by local competitors so that Wal-Mart continually had to hurt gross margin without increasing market share. After burning a considerable amount of money, Wal-Mart seemed to realise that it couldn’t price lead on a market share of only 2.9 per cent.

Competitors therefore observed with satisfaction how Rollback prices became less and less aggressive and how these were even put back up again between campaigns. In fact, few competitors took them seriously after a while because most Rollbacks only served to reduce prices to average trade levels.

Although Wal-Mart naturally contested this, consumer research group GfK Gruppe found Aldi cheaper on such big consumer ticket items as cakes, lemonades, coffee and chocolates, and hypermarket competitors cheaper by an average of 2 to 13 index points.

Own Label Confusion

Wal-Mart also tried to flank its price strategy with a number of own label programmes. These included its premium range “Great Value”, which confusingly also contained discount lines, and its “Smart Price” range for basic commodities.

The result was chaos. German shoppers were confused by a bewildering proposition of “Rollbacks”, “Smart Prices”, “EDLPs”, “Great Values”, “Save Still Mores”, “Always Low Prices” and “Wow Prices”.

Wal-Mart Germany didn’t only fail in its original intention of becoming “Europe’s second-largest provider of own label after Carrefour”. Smart Prices also hurt bottom line. The Great Value premium brand failed to gain acceptance and make up for lost gross margin.

For instance, competitors gleefully report how Great Value coffee lingered on the shelves until nearly sell-by date when it had to be sold at below Smart Price level.

Logistics Chaos

Having failed to grow top line sufficiently, Wal-Mart tried to improve bottom line via centralising distribution. The original aim was to reduce store inventory by 20 per cent and to increase average annual stock turn from 3 to 5.5.

Regardless of the fact that its German stores and suppliers work on a direct delivery basis, US-style distribution systems were phased in via the Tibbett & Britten subsidiary SCM Supply Chain Management as from the second quarter of 1999.

This required the construction of a 25,000 square metre central depot in Kempen and later a second one in Hockenheim.

Given the major differences between US and German distribution systems, the chaos resulting from the transition to central distribution can hardly surprise. Individual store consignments got mixed up, and it was difficult to know where damaged goods had originally come from.

As neither ramps nor storage rooms could cope with delivery volumes, staff sometimes had to form human chains in order to unload incoming lorries, and provisional storage capacity was improvised by using tents and empty truck containers.

High Out-Of-Stock Levels
The decision to scan on arrival meant that even the smallest packages had to be slit open in the unloading bays. Wal-Mart simply didn’t employ enough backroom staff for such detailed work. Long queues of trucks began to form outside the stores.

With drivers complaining of average waits of five hours and of being sent home without notice, threats of damage claims grew louder and louder. Worse still, out-of-stock levels were estimated to have sunk to below 90 per cent. In emergencies store managers even had to buy fresh food from neighbourhood competitors.

Despite flying in droves of management consultants from the USA, only an estimated 35 per cent of sales ever ran through Kempen central depot. Originally 80 per cent had been planned.

In August 2001 Wal-Mart was obliged to ask suppliers to switch back to direct delivery with a partial return to palettes. Hockenheim was abandoned for a cost of around €5m, Kempen was reduced to non-food, and food logistics were outsourced to SLS, a subsidiary of Alli Logistik.

However, out-of-stocks remained a problem prior to the opening of a new logistics centre for non-food and dry goods in Bingen.

The whole affair damaged Wal-Mart’s image and hurt its reputation as a logistics expert. Out-of-stocks caused customer dissatisfaction, and lower sales disappointed suppliers.

Antagonised Suppliers

Vendors complained that whereas Wal-Mart demanded compensation for the slightest non-adherence to contract, no compensation was offered for their loss of time and revenue.

Surely, in view of the centralization of distribution, price cuts and own label initiatives, it might have been better to woo rather than aggravate suppliers? But despite talking a lot about cooperation, Wal-Mart is used to bullying vendors in the USA with its colossal buying power.

In Germany, however, Wal-Mart was only at most the fifth-largest hypermarket operator. In the absence of any significant overlap between its US and German assortments, Wal-Mart also could not significantly increase local buying volumes. 

Unused to acting from a position of weakness, Wal-Mart wined and dined 30 suppliers in Kempen to illustrate the savings to be gained by central distribution. As they left, they were told the joyous news that this would lead to a renegotiation of terms and conditions of 8 per cent –- in Wal-Mart’s favour.

A further opulent show was put on for suppliers in Mannheim in May 1999. Following the invite, vendors were sent a form obliging them to list possible savings in distribution and logistics as a precursor to granting Wal-Mart better terms.

Vendor Score Cards

In August 1999 Wal-Mart unilaterally set new standards in its vendor contracts, including the right to inspect supplier premises without notice, which is not standard practice in Germany. It also claimed the right to return goods and especially seasonal lines at suppliers’ cost if various quality criteria have not been met.

Again, this is unusual in Germany where compensation issues are dealt with under different heads of the contract. Vendors also reject what they regard as Wal-Mart’s rubber-band definition of seasonal lines.

Unabashed by the chaos within its own distribution systems and high level of out-of-stocks, Wal-Mart further aggravated local suppliers by introducing its American system of Vendor Score Cards which evaluates supplier efficiency somewhat like a master giving marks to prep schoolboys.

So, despite calling its suppliers “partners”, Wal-Mart often engaged in fruitless argument on such points as delivery efficiency, replacement and handling costs as well as faulty EAN codes.

Constant Management Changes
Perhaps all these tactical and strategic mistakes could have been mastered had there been harmony and purpose within the ranks of Wal-Mart Germany, but from the beginning it was a house divided against itself. Since 1997 there was a rapid succession of CEOs.

The first to be appointed was Ron Tiarks who, without speaking more than rudimentary German, had the task of “introducing the Wal-Mart philosophy into Germany”. He quickly rid himself of long-standing German managers Arthur Reinshagen, Torsten Alfes and Thilo Keitel.

Tiarks then proceeded, with Joe Tapper and Dwight Isringhausen, to build himself an American island. After only 16 months Ron Tiarks left for the USA.

His successor, ex-Asda CEO Allan Leighton, also couldn’t speak German and knew nothing about German retailing. Leighton based himself in Leeds in northern England and only made sporadic appearances in Wuppertal.

With constant travelling between Bentonville, Leeds, and Wuppertal -- none of which are known for their directness of access -- he seemed to be in a state of permanent jet lag. Small wonder that Leighton left the sinking ship after less than ten months in September 2000.

Eight months of limbo followed during which European CEO Dave Ferguson again attempted to run Wal-Mart Germany from far away Leeds with no knowledge of German or local retailing.

Eventually in May 2001, three and a half years after entry onto the German market, Wal-Mart deigned to employ its first German CEO in the person of Dr. Kay Hafner. Although Hafner was recognised as a convenience expert, this surprised many in the trade.

Hafner was a delivered wholesale man specialised in providing petrol forecourt stations and kiosks with high-margin convenience products. He had no significant experience of discount, hypermarkets or restructuring loss-making operations.

As soon as Wal-Mart bought Wertkauf and Interspar, there was a rapid and continuous exodus of German middle management.

The high personnel fluctuation may have suited the Americans’ hire-and-fire mentality, but the lack of continuity in management did not exactly reassure local suppliers and staff who traditionally expect stable, long-term relationships.

Union bashing

In a further wrong-footed estimation of local culture Wal-Mart introduced its union-bashing activities into Germany at a time when their support would have been very useful. By refusing to sign a nationwide wage tariff contract, Wal-Mart tried to kill a national sacred cow from a position of weakness.

Of course, there is nothing illegal in non-signature, but Wal-Mart made itself Public Enemy Number One with the German trade unions, which was totally unnecessary as it pays above-tariff anyway.

In line with its anti-union philosophy, Wal-Mart didn’t treat works councillors with the respect they are used to in Germany.

The works councillors claimed that they were asked to replace their regular meetings by “company barbecues” and that when they requested more information on the introduction of centralized distribution, they received the answer “But we’re one big family!”

Having unnecessarily alienated labour representatives in this way, Wal-Mart couldn't expect them to support management with its many staff difficulties. Whether the subject was relocating head office, fitting cameras at the tills, or reducing personnel costs, no-one was prepared to be an ally.

So labour relations became increasingly nasty. Threats of store closures and the refusal to publish accounts gave both works council and trade unions ample ammunition for strikes and legal threats.

One area where Wal-Mart could have done with trade union and works council support, but decided to go it alone, was its attempt to start a cultural revolution in the stores by introducing what it claims to be “the American way”.

Humiliated staff
Thus, whether they liked it or not, every morning staff members were now obliged to sound the Wal-Mart cheer because this once impressed founder Sam Walton when he was on his travels in South Korea.

Although there was a minority who liked the novelty, the Wal-Mart chant and dance didn’t go down well with others. Many staff told Lebensmittel Zeitung that they found it both stupid and embarrassing.

For instance, one cashier lady told me after a store visit: “Except for when you press people come, quite frankly, when they start their wiggle we hide in the toilet”.

Wal-Mart never understood that the chant doesn’t suit modern Germany. Recent history has made many Germans critical of forced group activities. Others were unpleasantly reminded of the mass meetings in vogue under communism in the former German Democratic Republic.

Interestingly, the one American idea which would have gone down well with German staff, i.e., making employees shareholders in the business, was not introduced. Presumably for reasons of cost, Wal-Mart thus had to compromise on one of the central tenets of staff motivation as originally outlined by Sam Walton.

Lack of Cultural Sensitivity
A further example of lack of cultural sensitivity was when head office moved 200 kilometres from Karlsruhe to Wuppertal in mid-1999. Wal-Mart almost certainly meant what it offered sincerely, i.e., to retain all staff willing to relocate.

What the Americans obviously didn’t understand is that, unlike the flexible and mobile US work forces they are used to dealing with, some Germans would rather be unemployed than work in the next village, let alone move 200 kilometres. So, unintentionally, Wal-Mart's generous offer looked cynical to many of the locals.

Worst of all, Wal-Mart told its works council that sales must double or sites be closed. What was meant to galvanize staff productivity was taken as a threat. The powerful trade union ver.di then made a legal demand for the inspection of the 1999 and 2000 balance sheets and Profit & Loss accounts.

Although around a third of Germany’s limited companies fail to deposit their annual accounts with their local district court, the matter is usually a non-issue if no party takes legal action. But by provoking ver.di into demanding them, Wal-Mart unnecessarily ran the risk of increasingly heavy fines.

But beyond any issue of legality, Wal-Mart was surely playing a silly game. However embarrassed it may have been about publishing its losses in Germany, dragging its feet only nurtured fears among the workforce that massive redundancies were on the way.

In the event, disgruntled works council and trade unions were able to mobilise considerable support for strike action, which harmed both sales and the customer franchise. They duly played on Wal-Mart’s refusal to sign national wage tariffs and its lack of transparency on losses, potential store closures, personnel cuts etc.

When redundancies, increases in overtime, the non-renewal of temporary contracts, and store closures followed, all became grist to the unions’ mill.

Alternative Retrospective Scenarios
In retrospect, how might Wal-Mart have extracted itself from the situation it got itself into in Germany? Certainly none of its initiatives worked, whether that was price cutting, reformatting stores, centralizing logistics, extending own label or increasing staff.

In the absence of organic growth potential, Wal-Mart was obliged to either continue to buy its way into the German market or exit it completely. Eventually, and at great cost to its shareholders, it chose the latter.

After Wal-Mart had been pre-empted by its competitors on the purchase of Kaufland, Marktkauf, Allkauf and Kriegbaum, only a few smaller acquisition candidates remained, but their purchase would not have significantly changed the American's weak strategic situation.

One way to have cut the Gordian knot would have been for Wal-Mart to have bought Metro Group’s 'real,-' hypermarkets, which would have made it the country’s largest hypermarket operator.

Or, it could have bought the whole Metro Group. This would have provided a number of saleable assets worth considerably more than their market cap at the time. It would also have brought Europe’s leading Cash & Carry operation which could have been integrated into Wal-Mart’s international “Sam’s Club” fascia.

However, the negotiations, which, incidentally, both parties denied, never came to fruition.

In retrospect, Wal-Mart seems to have entered Germany with its eyes firmly shut and not done its homework in advance. It paid a lot of money to learn the simple lesson that Germany is different from the USA.

Did this occur through naively underestimating the complexities of a mature foreign market, through cultural arrogance, or simply through having more money than sense?

Lebensmittel Zeitung with its online sisters (photo: LZ)
Lebensmittel Zeitung with its online sisters
Read in German: 'Wir denken auch an Europa'
, an interview with Bob Martin, Walmart Chief of International Operations, on page 42 of Lebensmittel Zeitung, no. 41S, 07.10.1997; 'Wir sind noch am Lernen', an interview with Ron Tiarks, Walmart CEO Germany, on page 38 of Lebensmittel Zeitung, no. 19, 08.05.1998; and 'Great Value wird den Markt erobern', an interview with Allan Leighton, Walmart CEO Europe, on page 32 of Lebensmittel Zeitung, no. 31, 04.08.2000 by international editor Mike Dawson

German Retail Blog

Sign up for your FREE newsletter now!

Comments for this article are closed.

  1. Created 29 September, 2009 17:39 | Permanent link

    I just want to know , what is the present picture of Walmart in Germany? Will it come back or it is permanently sold to Metro AG?

  2. Created 12 October, 2009 16:18 | Permanent link

    When Wal-Mart sold its German operations to Metro Group, the terms of the deal were so advantageous for Metro Group, that there was some trade speculation regarding a secret pact between both parties whereby Wal-Mart would have the option to buy Metro Group's hypermarket arm at some later date.

    Although one should never say "never" in retailing, this is probably more for conspiracy theorists.

    Wal-Mart was certainly dead pleased to exit Germany asap.

    Also, the joint-venture with Bharti in India as well as the hiring of a former top Rewe manager to research opportunities on the Russian market are a clear indication that Wal-Mart sees far more interesting possibilities in dynamic threshold economies -- surely rightly so.

  3. Created 4 March, 2010 13:38 | Permanent link

    The reason the nice people of Germany will not welcome Wal*Mart back.

    "Wal-Mart China persists in local procurement which provides more job opportunities, supports local manufacture industry and promotes local economy. So far, 95% of merchandising sold at Wal-Mart China store are local products by which Wal-Mart has established business relations with nearly 20,000 suppliers. At Wal-Mart, we treat suppliers as partners and would like to develop with them. In 2008 Wal-Mart won the Supplier Satisfaction published by Business Information of Shanghai for five consecutive years."

    That's on their China web page under "About Us."

    And with more and more people around the world reading this from the article that Lance Winslow wrote....

    "Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at $433bn a year for China to have all of our money, leaving no money flow for us to circulate? At a $17 trillion economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what's in the best interests, and we should make sure that trade is not only free, but fair too."

    I can't blame them.

This is an English-language blog, please write all comments in English!
Thank you.