Marks and Spencer has 344 shops in 30 countries. It is not the only British retail company to realise the potential of foreign markets. "More and more companies are now looking to expand abroad," says Clive Grant from Corporate Intelligence on Retailing and author of the soon to be published UK Retailers Cross Boarder Activities. Retailing used to be a very domestic affair. In any one city only a few per cent of shops would be owned by foreigners. But, as markets approach capacity - try and name a town which doesn't have a supermarket near it -companies are obliged to look elsewhere for profits. They can either diversify, which is risky, or go abroad."
Share holder pressure, the attraction of higher profit margins and gaps in overseas markets are some other reasons why nearly 100 of the top 700 retailing companies in this country, now have branches abroad.
According to Mike Fine, consultant with Management Horizons, a retail consulting firm, the "internationalisation" of the market place is nothing new. "It started with international sourcing - companies going overseas to get cheaper shirts, in the late Seventies," he says. "Then, on to the realisation that there was an international consumer taste - everyone likes McDonalds. Now, for retailers in the UK north America and western Europe - where thevast majority of international retailers come from - it's a process that will continue."
Already, Benetton (Italian) has 7,000 outlets in 100 countries. McDonalds (American) has outlets in 120 countries. And the Body Shop (UK) with 1,121 shops in Europe, the Middle East, Asia, North America, South America and the Pacific, means there is scarcely a corner of the globe where you cannot buy a bottle of Peppermint Foot Lotion.
Does "internationalisation" then mean that Stuttgart will have exactly the same shops as Milton Keynes - a justifiable conclusion since Milton Keynes has virtually the same shops as every city in this country? "Not necessarily," says Fine, "what will happen, is that the big cities around the world: Milan, London, New York, Los Angeles, will increasingly have some of the same shops, but Paris will not look exactly like Chicago or Milan like London - home markets will always dominate."
The markets of the future, says Grant, "are Eastern Europe, Latin America, South Africa, the Pacific rim, and Turkey." Trading abroad, however, is not without its problems. "Investing abroad is risky," says Grant. "Mistakes have been made by people rushing in, not researching the market and making fundamental errors." Dixons, for example, went to the States and bought a company called Stylo. "The US economy turned down. Competition hotted up and they had to pull out," says Grant.
But it is not just the giants of British retailing who have successfully spread their wings. Among Marks and Spencer,Laura Ashley and all the other quintessentially British companies that have colonised Paris in recent years, is a little-known corner of Britain: Alexandria Workwear, a company which specialises in uniforms for chefs, dinnerladies and cleaners. The Parisians, it seems, just can't get enough of white knickers, floral frocks and British overalls.Reuse content