When it comes to dominating the US retail market, there's one clear winner
Walmart
The company brought in more than $500 billion in revenue in 2018
With Americans accounting for more than three quarters those sales
And a study found that in 2016, nearly every US consumer shopped at a Walmart at some point that year including online sales
But even though Walmart has comfortably held its number-one spot in the US for years
In Japan, well not so much
Walmart made headlines in July of 2018 when media outlet Nikkei Asian Review
reported that the company was looking to sell its Japanese subsidiaries Seiyu
Seiyu is a chain of supermarkets and
hypermarkets in Japan which sell a mix of consumables and general merchandise
Like US Walmart locations, Seiyu uses the everyday low-cost business plan
The Nikkei articles cited anonymous sources familiar with the matter
With other media outlets like Reuters and the Japan Times picking up the scoop
The Nikkei article said Seiyu faced difficulties due to the crowded food retail scene
as convenience stores, drugstores and online marketplaces create intense competition
Walmart told CNBC it is not in any discussions with prospective buyers to sell Seiyu and will continue doing business in Japan
But analysts who cite the company's lack of understanding of the Japanese culture
say the company's time in the country could be limited
A lot of retailers struggle with internationalization especially with food
Food is so regional, it's so crucial to people's cultures but if you go in and you don't really understand the consumer
and how you're gonna stand out in that sea of competition it is very, very difficult to make a dent
Walmart first got its start in Japan in 2002 when it purchased a minority stake of Seiyu
Walmart invested more than a billion dollars in Japanese operations before the company made Seiyu a fully owned subsidiary in 2008
But Seiyu was struggling even before Walmart took total control
In 2007, Seiyu saw a net loss of about $195 million
Now fast-forward to today
Walmart doesn't report its international businesses' individual earnings or losses in the companies' annual report
But we do know that there are less Seiyu units in 2018 than there were when Walmart first took full control
Walmart has closed more than a hundred Seiyu units since 2014
So why is Seiyu struggling to capture the
Japanese market
Some analysts tell us it's because Walmart failed to grasp the preferences of the Japanese consumer
Japanese consumers like to buy fresh, locally sourced foods which Seiyu didn't offer
And the everyday low price strategy that has made Walmart so popular with American shoppers
just confuse Japanese consumers who like to seek out specific deals and sales
Price is really important to them and in fact they enjoy the sort of treasure hunt of prices
Supermarkets will distribute flyers everyday, coupons and oftentimes Japanese consumers will go to multiple
stores in order to take advantage of
those daily sales
Walmart's misunderstanding of Japanese preferences isn't the only reason Seiyu is stumbling in Japan though
The local retail landscape which is rife with different shopping methods, is giving Seiyu a run for its money
All of that competition only gives Seiyu 12% market share in Japan
Trailing behind companies like Japan based Aeon which has 45% of the market share and Japan's Ito Yokado which has 14%
according to data from Euromonitor International
So you can't seem to catch local consumers attention
However, the struggles faced by international brands in the Japanese market aren't exclusive to Walmart
In 2012, the UK's biggest retailer, Tesco bailed out of Japan after nine years
when it sold its 117 outlets to Japan's AEON, which leads the country in market share
and France's Carrefour sold its 8 outlets to AEON in 2005
But there is one international food retailer still rearing its head in Japan and that's American wholesaler Costco
Though Costco only has 26 units in Japan, the company has managed to capture the Japanese market since it entered in 1999
with only 1/10 of the number of stores to Seiyu
Costco recorded revenues that were close to half of what Seiyu made in 2017
Grant said Costco is so successful because it did what Seiyu didn't, create an experience
Japanese consumers don't like to buy in bulk, however that didn't hurt Costco ,it actually helped it
That's because Costco is so different from the rest of Japanese supermarkets that consumers actually choose to shop there
just to get a different shopping experience
Seiyu didn't do that, it was pretty much just another supermarket and if Walmart does decide to exit Japan
it wouldn't be the first venture the company pulled away from in recent months
Just a month before Nikkei reported that Walmart was looking to sell Seiyu
Walmart announced that it sold an 80% stake of its operations in Brazil to private equity firm Advent International
Walmart said it withdrew from Brazil because it was a lower growth market
The company also said Brazil's recession combined with operational issues made it difficult for it to expand there
So Japan isn't the only market giving Walmart trouble but don't abandon all hope when it comes to Walmart's business in Japan
Analysts say there's a way the company can gain popularity there
In January, Walmart and Japanese e-commerce platform Rakuten announced that they would be launching an online delivery service in Japan
using Rakuten's online platform and Seiyu's merchandise, which could attract Japanese consumers
So Walmart may just be able to turn its luck in Japan
With the company placing a focus on online retail with the Rakuten deal, it plays right into Japanese consumers' preferences
but if it's online delivery service plan doesn't gain enough traction this could mean the end of Walmart in Japan
