Keyword

Grocery retail, discount chains, international divestment, Aldi, Greece

Abstract

In a context of generalized economic recession consumers turn to cheaper foodstuffs and discounters expand their market share at the expense of conventional food retailers. Discounter’s international expansion is proceeding in many locations simultaneously, with varying results. There are several success stories but international expansion not infrequently ends in failure and withdrawal from the foreign market. Quite recently, at the end of 2010, the German discounter Aldi withdrew from Greece abandoning an ambitious investment programme.The aim of this paper is to investigate the crucial factors behind the recent withdrawal of the Aldi discount chain from Greece. Ccompany sources have placed unilateral emphasis on the external environment and encourage the idea that all have to do with the unfavorable external conditions. However ex post scrutiny of Aldi’s investment programme in Greece reveals a number of mistaken appraisals and unfortunate choices which took place during the phases of preparation and implementation of the investment. It is argued that, among other factors, overestimation of the size and potential of the domestic discounters’ market and incoherent elaboration of the network of retail outlets were largely responsible for the failure of the undertaking.


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