I have been asking this question ever since IKEA came here. IKEA stores in Israel perform among the best stores IKEA operates per capita.
I called Target, Wal Mart, and several other European giants (Carre Four, TESCO, Metro)
Target does not operate internationally. Wal Mart was here in the early 90's and failed. Although they ran a chain of small stores under an Israeli brand, not like they operate now. Basically they all have said the same thing. They don't come to Israel because of scale. The market is simply too small for them to come here and offer discount prices. Even though the per capita income is as much or higher than the areas surrounding most Targets and Wal Marts, the benefits (profitable sales) do not outweigh the risks of operating a store here. (Franchising, Real Estate Costs, Distribution, employment costs, currency rates, compliance, taxation) In other words, even though they know the store would out perform most of the stores in their chains, its not worth the headache of getting it started and maintaining its performance. IKEA, Toys R US, Office Depot and ACE are all very successful chains here so I disagree, then again when your company is generating $400 billion dollars in yearly revenue, its hard to argue with their logic.
India has some very nice large format retail chains with good quality merchandise at reasonable prices. They also generate Israeli type revenues in a very competitive, young market. I think the possiblity of having one of their stores in Israel seems much more realistic,
What I would like to know is there are franchisee rights already obtained for Old Navy in Israel, why are they so slow to bring it to market. Old Navy would be massively successful here, and compete directly with H&M which is a runaway smash hit. GAP is treading water and Old Navy would have been the much wiser choice for a chain.