April 22, 2016

Schwarz Group is Europe's Mr. Big Spender

Shirley Bassey (photo: By Nyctc7 (Own work) [Public domain], via Wikimedia Commons)
Will Shirley Bassey now shop at Lidl?
It is not known whether Dame Shirley Bassey is still looking for a big spender at the age of 79. But, if so, the lady can certainly find one with German retailer Schwarz-Gruppe (Schwarz Group) whose spending has now reached record levels. Last year, the owner of discount subsidiary Lidl and its XXL-sized brother Kaufland invested a whopping €5bn. This impressive sum was essentially used to upgrade and expand the store base in Germany and Europe. That was considerably more cash than the annual investment of major rivals Edeka, Rewe and Metro Group put together. It also easily beats that of other national market leaders in Europe such as Carrefour in France, Ahold in the Netherlands, Migros in Switzerland or Tesco in the UK. Admittedly, the capital expenditure (capex) of US giant Walmart was more than twice as high last year (€10.2bn). But, if you put capex in relation to net revenues for both companies, then our slide rule gives Schwarz Group 6.3 per cent against only 2.4 per cent for Walmart. In fact, our thrifty Swabians topped the international league of all the grocery multiples we reviewed (cf. chart below).
April 8, 2016

The ladies conquer Aldi – at last

Aldi Süd models on the catwalk (photo: Heimifoto/L. Heimrath)
Blue Motion: Jette Joop turns an Aldi store in Düsseldorf into a catwalk
Is this really the Aldi we thought we knew? For the first time in its history Aldi Süd (Aldi South) has used a fashion show to present a new clothing range. The ladies' spring collection, created by star designer Jette Joop, will be available at and add a touch of glamour to all the German discounter's stores as from Monday under the "Blue Motion" own label. Using the motto "Gutes Design muss nicht teuer sein" (Good Design Doesn't Have to Be Expensive), the range was celebrated with great razzamatazz this week at Aldi's flagship store on Königsallee, a chichi shopping street in Düsseldorf. What a change to the usual no-frills presentation of clothing in wire bargain bins! In a further break with tradition, customers were turned away after midday in order to transform the store into a catwalk. This will have the old guard at Aldi rolling in their graves. But could it be that Aldi Süd is starting to get sexy in its mid-50s?
April 7, 2016

What Metro could learn from Jimi Hendrix

Jimi Hendrix (photo: Dieter Klar/dpa-Bildarchiv)
Jimi Hendrix: "Castles made of sand"
It was only Wednesday last week that German retail giant Metro Group announced its intention to split into two by mid-2017. Its Metro Cash & Carry and "real,-" hypermarket subsidiaries, representing around two-thirds of annual group revenues (€58bn) in 2014/15, are to be spun off in an independent unit which will seek a separate listing. Meanwhile, electronics retailer Media-Saturn will stay part of the Metro Group. The news of the demerger upped the share price by more than 12 per cent on the day, providing a welcome fillip for long-suffering shareholders. Since then analysts in the City of London have bombarded their clients with research papers containing likely scenarios for the future. Clearly the financial community are suckers for any kind of story – much as wide-eyed children are entranced by thimble riggers at a funfair. Perhaps, though, these highly-paid experts, who pride themselves on the sophistication of their valuation techniques, should take a more sober view of future prospects. However parent company Metro may repackage its progeny, the new entities will not suddenly become something totally different.
March 23, 2016

Don't miss our conference: Marketing Myths!?

Mythos Marketing seminar (photo: dfv Conference Group)
Roll up, roll up! Don't miss the chance to register and reserve your place at our exciting new conference Marketing Myths!? (Mythos Marketing) on the 2nd of June 2016 in Frankfurt, Germany. Why not take advantage of the early-bird price by registering no later than April 15 and save €100? This English-language event will bring together top German retail & fmcg managers as well as senior members of the fashion, advertising and food service industries. Over 100 participants from all over the world will also be represented at this first-class networking event. Our keynote speaker will be marketing guru Marcel Corstjens, emeritus Unilever Chaired Professor at INSEAD business school. Corstjens will also present his new book 'Penetration.' and personally sign copies for all delegates. Other top speakers include Jürgen Schröcker, management coach and former Chief Marketing Officer at German DIY giant Hornbach; Jürgen Kohnen, CM & Innovation Director at Procter & Gamble Germany; and mymuesli co-founder Max Wittrock. Want to know more?
March 11, 2016

Lidl and Kaufland get chummy

Schwarz Group CEO Klaus Gehrig (photo: Schwarz Gruppe)
Big Buddy: CEO Klaus Gehrig wants employees throughout the Schwarz Group empire to take off their ties and call each other by their first names
Contrary to what the young might believe, the older one gets, the more absurd life seems. Perhaps, in the end, all appears surreal. Along the way one may find existence tragic, but often also humorous. A recent example has just been provided by German discount giant Schwarz Group. Here we have the amusing spectacle of a retailer posting nearly €80bn in annual net revenues characterised by Teutonic efficiency and a strict hierarchy who are becoming increasingly pally. A "preference" has now been expressed from on high that staff at its Lidl and Kaufland subsidiaries only use first names in future. Officially, everyone has a choice, but doubtless in the traditions of old this will be the end of all surnames within both companies. The new everyone-is-my-best-buddy policy follows a similar wish from the c-suite that no ties are worn at the workplace. In a fresh break with taboo, this has just been accompanied by an expression of desire that all Lidl and Kaufland employees use the informal "Du" rather than "Sie" when addressing each other, regardless of rank. Now where will all this lead?
March 4, 2016

Brexit, Boris and British retailers

BackBoris2012 Campaign Team (photo: Flickr_6996023785_aaa16363b8_k)
Voice of England: Boris Johnson, Lord Mayor of London, is now with the Out team
What on earth do those quirky island people want this time? The question would broadly sum up the rather puzzled reaction most Germans have to the UK's referendum on the continuance of EU membership on June 23. Their puzzlement surely knows no bounds now that the generally diffuse Brexit camp has found the figurehead it so desperately needed in Boris Johnson, the immensely entertaining Lord Mayor of London. Here one is tempted to quote Frederick the Great on William Pitt the Elder: "England has long been in labour, but at last she has brought forth a man."* The Brits wouldn't be Brits, however, if the "Out" campaigners hadn't chosen someone quintessentially eccentric to lead them. Johnson, with a charismatic personality and an offbeat sense of humour, sports a variety of unkempt hairstyles that make even Donald Trump look tame. Given that virtually the entire British Establishment are for continuing the delights of Brussels bureaucracy, it is unlikely that this modern-day successor to Dick Whittington will be able to make a change. However, there has always been a strong groundswell of public opinion against the membership of any European club since premier Ted Heath marched the country in 43 years ago without consulting the British people. In the event that Boris & Co make a Brexit despite the odds, what would be the likely effect on UK and European retailers and their suppliers? And how do their German counterparts view the strange wish of the British people to determine their own destiny?
February 26, 2016

Marcel Corstjens talks brands & retailing

Professor Marcel Corstjens, INSEAD (photo: Mark Mackenzie)
Marcel Corstjens: "I found it necessary to identify and unravel a number of common marketing myths"
Ever jogged along the Thames Path around the Isle of Dogs in London and wondered who are the denizens of the high-rise apartment blocks that have been stamped out of the once derelict docklands around Canary Wharf? Oil-rich Arabs, cigar-smoking Texans or just the Russian Mafia? Lebensmittel Zeitung, as a cauldron of investigative journalism, can now reveal the identity of at least one resident in the form of Marcel Corstjens, emeritus professor for marketing at the elite French business school INSEAD. In his flat, which can only be reached via a security gate with an electronic code and a concierge, Corstjens and his brilliant business wife Judy have made coffee for their visitors from Germany on a stylish capsule machine. Their cute-looking dog, with floppy ears, an unpronounceable pedigree, and apparently also a tendency to bite strangers, is kept carefully away in another room. However, man's best friend politely refrains from woofing when we arrive with photographer Mark Mackenzie lugging heavyweight lighting stands etc. Corstjens (66) holds court in a radiantly bright sitting room with a huge bay window overlooking the River and the City, which Picasso would have immediately requisitioned for an atelier. The sprightly Belgian academic, with a faint American accent and a large dose of animal magnetism, soon entrances his interviewers. They have come to learn more about Corstjens' new book Penetration and what this bestselling author wants to say to his trade readers.
February 26, 2016

Marcel Corstjens debunks marketing myths

Professor Marcel Corstjens holding his latest book (photo: Mark Mackenzie)
Marcel Corstjens: Gives the readers of Lebensmittel Zeitung and German Retail Blog exclusive insight into his latest trade bestseller
Not another marketing book! This understandable reaction will soon have you eating your hat because 'Penetration.' is going to be a best-seller in the trade and international business circles. You won't have read ten pages before you place an order for your friends on Amazon tout de suite. The author is none less than trade guru Marcel Corstjens, Emeritus Unilever Chaired Professor of Marketing at French business school INSEAD. The former non-executive board director of Jerónimo Martins and member of the advisory board of TrueStart is now also an entrepreneur and consultant. Although the title may arouse expectations of a more erotic nature, the subtitle, The New Battle for Mind Space and Shelf Space, evokes the smash hit Storewars Corstjens co-authored with his wife Judy in the 1990s. In this context, penetration simply means what the Germans would call Käuferreichweite, i.e., the number of consumers who buy your product and the number of households shopping in a store at least once within a defined period of time. In his latest literary provocation Corstjens examines a number of 'standard truths' in marketing that are still taken as gospel by most retailers & brand owners. The illustrious professor then proceeds to demolish them with caustic wit and palpable glee.
February 9, 2016

Sir Stelios and his anything but easy food store

 Sir Stelios Haji-Ioannou (photo: easyGroup)
Sir Stelios Haji-Ioannou: A popular hero tries his hand at retailing
So the man who once claimed that food retailing was "easy-peasy" has done it at last. For a long time it looked as if the eloquent 48-year-old resident of Monaco had been daunted by the rigours and perplexities of council planning permissions and supplier contracts. But Sir Stelios Haji-Ioannou has now opened a first low-budget easyFoodstore in gritty London suburb Park Royal, thus making good on his promise to undercut German discounters Aldi and Lidl in the UK. Like a latter-day Freddie Laker, the charismatic Greek-Cypriot billionaire is on a self-appointed mission to give the British people cheaper prices. The story of a guy, whose favourite TV programme is said to be Only Fools and Horses, is well known. After creating the low-cost airline easyJet in 1995 and successfully taking it public five years later, Sir Stelios went on to found easyHotel, easyPizza, easyBus, easyGym etc. under the umbrella of his private investment vehicle easyGroup. A serial entrepreneur will best appreciate the Derek 'Del Boy' Trotter philosophy of "some you win and some you lose". So is easyFoodstore just a good PR stunt, or is Sir Stelios serious? And, if he is, does he have a bat's chance in hell?
February 4, 2016

Spanish beer, craft beer and Mahou San Miguel

Jonathan Stordy, MD International, Mahou San Miguel (photo: Mahou San Miguel)
Jonathan Stordy: "We're thirsty for more"
As the title of this blog would seem to imply, this interview has a lot to do with beer. So, if you don't like the amber nectar or have taken the Pledge with The Woman's Christian Temperance Union, but are determined to do a bit of cyberloafing, then you must think niche player and international marketing strategy. Niche player?! Delightfully named Grupo Mahou-San Miguel is a Spanish brewer founded in its present form in 2000 whose roots go back to 1890. Today, the maker of such archetypal Spanish brands as Mahou, San Miguel and Alhambra is the largest maker of beers on the Iberian peninsular and Europe's number five. In 2014 the privately-owned company run by Alberto Rodriguez-Toquero sold 15m hectolitres of beer, water and soft drinks, posted €1.2bn in revenues, and raked in an operating profit of €168m. But such is the consolidation on the global beer market that even this acquisitive middle-weight from sunny Madrid is dwarfed by monster boys Anheuser-Busch InBev (ABI) and potential bride-to-be SABMiller or Heineken. International MD Jonathan Stordy (53) is a Brit who clearly likes to mix his drinks. He jumped wagon to beer in 2013 after a distinguished, 22-year career in spirits as CEO of Russian Standard Vodka and General Manager Europe at Beam Suntory. Stordy is surely the right man in the right place at the right time as international business inevitably grows in strategic importance for Mahou San Miguel on a declining home market.