July 20, 2017

German drugstore barons dwarfed by WBA

Lady shampooing in a shower (photo: lenets_tan_Fotolia_164331842_M)
Global trend: Drugstore sales are foaming
The world's insatiable demand for health & beauty products has made a number of drugstore owners seriously rich. These include Stefano Pessina, CEO of Chicago-based Walgreens Boots Alliance (WBA), and Li Ka-shing, Chairman of Hong Kong conglomerate CK Hutchison Holdings and retail subsidiary A.S. Watson. Both are the largest shareholders in their respective companies and personal billionaires. It isn't wise to speculate about the pecuniary situations of Götz Werner, Dirk Roßmann and Erwin Müller, the founders of leading German drugstore chains dm, Rossmann and Müller. But investment advisers would certainly regard them as high-net-worth individuals. Although they rank among the planet's wealthy, their thriving businesses hardly extend beyond Europe and cannot match the US and Chinese giant in annual sales, store count or global reach. Put in health & beauty terms, they are provincial European belles in a Miss World contest.
July 13, 2017

German retailers sell to the world

The globe (photo: WavebreakmediaMicro_Fotolia)
Future customers: And when you grow up, you too will be able to shop at a German retailer...
For a country with just 1 per cent of the world's population Germany's retailers aren't doing a bad job at selling their wares on the global marketplace. LZ Retailytics data show that eleven retail groups posted record gross revenues totalling €190bn last year in 41 foreign countries on four continents. This whopping sum is around three-and-a-half times more than leading grocer Edeka achieves on its home market. German retailers began their international expansion in the late 1960's and have been gaining momentum ever since. The principal pioneers were Metro Cash & Carry and hard discounters Aldi and Lidl. But who else is conquering the world from Frisco to Sydney?
June 23, 2017

Amazon lands on earth at Whole Foods in Texas

UFO (photo: aleciccotelli/Fotolia)
No doubt about it
After years of probing Planet Food Retail, Amazon's flying saucer has finally landed at Whole Foods headquarters in Austin/Texas. The traveller from deepest cyberspace must be serious, otherwise it wouldn't be offering $13.7bn for the privilege of buying the largest organic food retailer in the United States. The thing about flying saucers, of course, is that they can go wherever they want. So how about Germany and Old Europe, dear aliens?
June 9, 2017

Saks OFF 5TH debuts in Europe

Saks OFF 5TH checkout scene (photo: Saks)
Paradise for "fashion-aware" ladies
Carrie Bradshaw and her three girlfriends of Sex and the City fame will love the new Saks OFF 5TH in Dusseldorf. Inner-city, off-price fashion concepts are on a roll here in Germany where the segment is dominated by TK Maxx. Many would love to wear international premium fashion brands, but financial prudence makes most of us wary of anything more than window shopping in swanky shopping malls. The chance to save up to 60 per cent on the recommended retail price is therefore highly seductive. This is especially the case when you can shop on the High Street without having to drive for an hour or two to a designer or village outlet centre. Of course, one has to accept that the product is six to twelve months old and not current season. But as the fashion-conscious seem increasingly ready to make this compromise for the savings involved, we had a little look for you.
June 8, 2017

Talk with European retailer buying alliance AMS

Mum's the word (photo: Jeremia Muench/Fotolia)
Mum's the word
Retailer buying alliances are often a hard nut for journalists to chew. Their executives are even more secretive than discounters and inhabit a cloak-and-dagger world that would appeal to Zorro. They only seem to meet behind closed doors or in airport lounges. It is virtually impossible to obtain their photo. You can never phone them directly. If calls are returned at all, it is via their assistants at HQ so that no inference can be made as to their location. If one writes, at best one will receive a few sibylline words within a cryptic email which pose more questions than they answer. Surprisingly, the MD of one buying alliance agreed to connect on LinkedIn, only to delete the connection when asked a question. Given the penchant for secrecy within his peer group, one can only thank Bert Swartsenburg, Managing Director of AMS-Sourcing, for a brief update on the activities of this major European buying group. He weighs his words carefully, but this is a manager who has not forgotten the art of communication.
June 6, 2017

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Logo of THE SPIN (photo: TextilWirtschaft/dfv Media Group)
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June 6, 2017

Heidi Klum gives Lidl USA a feminine touch

Heid Klum (photo: Lidl USA)
Heidi Klum
Not to be outdone by fellow discounter Aldi and Jette Joop, the US subsidiary of Lidl has joined forces with German supermodel Heidi Klum in a new fashion campaign. Lidl US announced today its first ever collaboration with the international fashion icon and designer. Heidi's new collection, which mirrors her characteristic style, will be available exclusively at Lidl and will launch across its network of stores later this year. With her vast expertise and success in the fashion industry, Heidi Klum has carefully designed a high-end, yet affordable fashion collection for Lidl, making the range accessible for everyone. Lidl's customers across Europe and the USA can look forward to seeing Heidi's exclusive collection launch later this year. Klum commented: "Lidl is known for making quality products at affordable prices, and I'm proud to partner with them on this fashion collaboration. I had so much fun designing the pieces in this collection and can't wait for you to see it." Well, neither can we, Heidi...
June 1, 2017

Welcome to Berlin, The Consumer Goods Forum

Berlin (photo: turtix/Shutterstock)
The decision by The Consumer Goods Forum to hold its 61st global summit this year in Berlin from June 20 to 23 is an honour for Germany. It also reflects the size and dynamism of the local market. Yet surprisingly only 25 of this influential trade body's 400 world-wide members, equally divided between retailers, manufacturers, and service providers/industry associations, come from Germany*. However, they number such heavyweights as Metro, Rewe or Henkel, and speakers at this year's venue include the CEOs of local retail giants Edeka and dm. Doubtless, representatives of secretive discounters Aldi, Lidl, and Kaufland will also attend the event, albeit with upturned collars and shaded glasses. But the mere presence of the good, great and beautiful doesn't protect any organisation, however illustrious, from becoming a mere talk shop. So we put Managing Director Peter Freedman through his paces and challenged him on how much progress the forum has made on international issues of vital strategic interest to the trade.
May 19, 2017

Lidl treks China's online Silk Road

Lidl on Tmall (source: screenshot)
Only days after Premier Xi Jinping announced his party's $900bn 'Belt and Road' initiative, Lidl is nearing completion of an online shop in the People's Republic. Like arch-rival Aldi, the German discount giant has chosen Alibaba's Tmall Global as its B2C platform. Although even the soft launch won't be until the end of May, the site can already be seen under https://lidl.tmall.hk/. Customers will initially be able to choose from around 60 food lines. These dry goods include breakfast products, such as Maribel raspberry jam or Crownfield granola, as well as pasta and cooking ingredients such as Balsamic vinegar. The offer is essentially own label. Unlike Aldi, who imports from Australia, Lidl is sourcing directly from Germany via its buying subsidiary in Hong Kong. So what else is new?
May 4, 2017

Amazon gets Fresh on Germany

Amazon Fresh customers in Germany (photo: Amazon)
When in Hollywood movies the bad guy asks the action hero's name, the cult answer is: "Your worst nightmare." As from today, German food retailers will at least find out whether Amazon Fresh is a game changer. They have certainly long been in denial. In a relentless hunt for sales, without even a cursory glance at the return on invested capital, local bricks & mortar retailers still can't build enough physical stores. This inexorable process has continued, regardless of how late such stores may be in their life cycle; regardless of the fact that Germany is already overstored by at least a third; and regardless of the growing consumer trend towards internet shopping. For years would-be pundits have comforted themselves by saying that the German market is so dominated by hard discounters that no online food retailer could ever make a profit here. For those readers who are not quite so sure, it might be worth looking at what Amazon has just begun in parts of Berlin and Potsdam.