There is a particular kind of ignorance – maybe even arrogance – that often infects successful American brands. It begins with a dangerous assumption: “People everywhere love what we love.” Then comes the second assumption: “Retail is retail.” And that is where the trouble starts.

When the American restaurant chain The Cheesecake Factory entered Australia through retail distribution first rather than restaurants, that move probably looked smart on paper. The brand had recognition. American food culture travels well. Cheesecake is indulgent, photogenic, and highly “Instagrammable.” Retail giants like Costco or Woolworths already had a strong footprint in Australia. What could possibly go wrong? Quite a bit.

The company’s cheesecakes first appeared through Costco, where the fit actually made strategic sense. Costco shoppers are accustomed to premium imported American products, bulk purchases, and “treasure hunt” consumption behavior. Costco customers do not merely buy groceries. They buy discovery. They buy novelty. They buy abundance. The Cheesecake Factory fit naturally into that ecosystem. But then came channel conflict.

Reports and consumer discussions suggest Costco was unhappy when identical Cheesecake Factory products began appearing at Woolworths Australia. Eventually, Costco dropped the line, leaving Woolworths as the primary retail channel. That decision may have looked harmless to executives sitting in conference rooms thousands of miles away. After all, Woolworths is enormous. It has national coverage. It reaches millions of shoppers every week. But scale is not positioning. And distribution is not strategy. This is where international business becomes merciless.

In the United States, The Cheesecake Factory occupies a strange but powerful position through their restaurants: oversized portions, celebratory dining, excess-as-experience. The brand is not merely selling cheesecake. It is selling American indulgence. Costco customers in Australia understand and even seek out that proposition. The warehouse environment amplifies it. Buying a giant American cheesecake at Costco feels coherent. It feels like part of the experience. At Woolworths, however, the same product suddenly competed in an entirely different psychological frame. Now it sat beside everyday supermarket desserts. Private-label cheesecakes. Local bakery products. Lower-priced alternatives. Routine grocery shopping behavior replaced experiential shopping behavior. The product did not change, the context did. And context is everything.

This is one of the deadliest sins in international business, assuming that a product carries the same meaning across channels, countries, and consumption environments. It does not. A luxury watch sold in a flagship boutique means one thing. The same watch sold at an airport clearance counter means something else entirely. The Cheesecake Factory appears to have learned that lesson the hard way.

Australian media enthusiastically covered the Woolworths launch in early 2024, portraying it as an exciting arrival of an iconic American dessert brand. But excitement is not the same as sustained demand. Discounting discussions and customer complaints about inconsistent availability soon began appearing online. Eventually, Woolworths also delisted the products and, suddenly, the brand had no meaningful retail presence left. An American success story had managed to alienate the very retailer that probably represented its best strategic fit in the Australian market. Classic channel-management failure.

Costco understood how to position The Cheesecake Factory in Australia better than Woolworths did, and perhaps better than The Cheesecake Factory itself did. At Costco, the cheesecake was an imported American event product. At Woolworths, it became just another frozen dessert. Those are not remotely the same thing. Many multinational firms obsess over market entry mode, pricing, and promotion while underestimating channel identity. Yet channels possess their own cultures, customer psychologies, and symbolic meanings. A retailer can elevate your brand. Or flatten it.

International business textbooks often describe distribution channels as pipelines. That is incorrect. They are stages. And if you place the right actor on the wrong stage, the audience stops believing the performance.