Brazilian retailing was protected from foreign competition during the 1980s because of the high environmental turbulence in Brazil resulting from hyperinflation, recession and government policies. To survive in such an environment, companies were forced to adapt their strategies and practices to specific local conditions.
During the 1990s, however, the Brazilian retailing environment changed substantially. Economic stabilization and the lowering of tariffs reduced entry barriers stimulating foreign competitors to enter. Such changes happened at the same time the world retailing industry was moving towards concentration and internationalization.
A market of 182 million people whose economy is recovering and average disposable income is on the rise, is attracting the interest of foreign retailers.
Since its market entry in 1994, Wal-Mart has had a steep learning curve in Brazil. In the early years it was ridiculed for selling golf kits in superstores located in low-income areas. In the past three years, however, it has rapidly become Brazil’s third largest retailer.