FRANKFURT – Wal-Mart announced that it is selling its 85 stores in Germany to retailer Metro Group, along with a loss of $1 billion, reports The New York Times.

Wal-Mart’s admission of defeat comes two months after announcing the sale of its stores in South Korea.

According to industry analysts, Wal-Mart “never got traction in a market that is characterized by unrelenting price competition, well-established discounters, and the cultural resistance of German shoppers to hypermarkets, which sell fresh vegetables a few aisles away from lawn mowers,” writes the newspaper.

“They walked into a triple-witching hour in Germany,” James Bacos, director of Mercer Management Consulting in Munich, told the Times, adding, “They got into Germany at a time when the whole market was shifting away from their model.”

Wal-Mart spokesperson Beth Keck told the newspaper the retailer “put a good effort” into Germany, noting that after taking a look at the overall competitive environment, the company realized it would be difficult to achieve the results it expected.

Keck said that Wal-Mart “continues to thrive in many countries outside the United States, with particularly robust results in Mexico, Canada, Brazil and Britain.”

The Times writes that some of Wal-Mart’s failure can be attributed to how it entered the German retail market, such as purchasing two stores, Wertkauf and Interspar, instead of “starting from scratch.” Therefore, the retailer was left with a “hodgepodge of stores” dispersed mostly in “poor locations.”

“They found they had some things to learn about the German market, and they did change, but maybe too late,” said Bacos.

Meanwhile, other issues that led to Wal-Mart’s demise were out its control, such as the domination of two German discount grocers, Aldi and Lidl.

“Germany is the home of the discounter,” Mark Josefson, a retail analyst at Kepler Securities in Frankfurt, told the Times, adding, “Wal-Mart is not competing on price, and that is one of its main attributes in its home market.”

Then there is the issue of German consumers – “one of the most parsimonious and price-conscious in Europe,” notes the Times.

According to Bacos, Germans spend less on retail purchases and profit margins in German retailing are the lowest in Europe.

“Wal-Mart has tried, for the better part of a decade, to adapt to this market,” Bacos told the newspaper, adding, “I think they’ve looked at the situation and come to the conclusion, ‘How long is it going to take?’”