December 18, 2014
"The global growth prospects for our company are very promising"
As John Kennedy, President Europe of global spirits giant Diageo, starts to pack his bags for a Christmas skiing holiday in St. Anton, he fully intends to celebrate with a glass or two of Cîroc vodka. Any hard-working exec may have a festive drink with family and friends. But, given the sober challenges posed within his specific liquor fief, you might have expected this one to be drowning his sorrows rather than chinking glasses. After all, the man has quite a cocktail to mix. Southern Europe, where the UK distiller's sales have been declining for five years, still suffers from a bad hangover after the financial crisis binge. Even in Western Europe Kennedy faces a conundrum familiar to many other global brand managers: How to rekindle growth on mature markets? And the addition of Uncle Vlad's Russia to his already huge responsibilities this summer might be interpreted as a very mixed blessing. So why does the 49-year-old Irish-American, who shares both a name and a New England accent with the former US president, see his glass as half full and not half empty?
December 11, 2014
The condemned live longer: Facebook execs Choi and Hunter look fit and healthy
It's not every day that you have guests from California, when one works in Frankfurt. They certainly don't come for the sun, the laid-back people or the slow, courteous drivers. And somehow the River Main does not compare with the Big Sur. When these long-haul travellers are from Facebook, one is a little puzzled. What could Erin Hunter and Jin Choi, with the zippy job titles Global Head FMCG & CPG Strategy viz. Industry Leader FMCG & Retail D-A-CH, possibly want from a German B2B newspaper? The purpose of their visit could hardly be to make the social media giant better known. After all, its 1.3bn active users continue to network relentlessly and to inform their online "friends" across the planet about their favourite pop star or sausage. At any rate, the talk with the slick delegation from Silicon Valley got off to a good start. Our sister rag "Horizont" had just interviewed Saatchi & Saatchi CEO Kevin Roberts. His controversial statement, "Facebook won't exist in three years' time", was blazoned for all to see on the big electronic screen in the entrance hall of our publishing company.
December 4, 2014
We are amused: Success at Coles makes for a happy manager
Strewth, blimey cobber! An offer to interview a top exec at an Ozzie retailer in the middle of Germany is about as unlikely as meeting a kangaroo or a dingo on the way to work. But like many surprises from the Lucky Country, this one had a logical reason and a seam of gold. Ian McLeod, Group Commercial Director of Australian conglomerate Wesfarmers Group, was speaking at this year's German Retail Congress in Berlin. Evidently McLeod thought that after a meeting with Angela Merkel etc., he would do well to curry favour with the local gentry and talk with our newspaper. We didn't need to be asked twice. During McLeod's six-year tenure as MD of Wesfarmers supermarket subsidiary Coles until this July, earnings more than doubled. With some help from Boston Consulting Group, he masterminded a major turnaround at the country's second-largest retailer, despite fierce competition from the likes of Woolworths, Aldi and Costco. McLeod spent most of his earlier career with Asda where he was a member of the Management Board and the Executive Board of Wal-Mart Germany. This, then, is a man with a tale to tell.
November 20, 2014
While you were sleeping: RetailUpdate reveals what the global trade has been up to over the last 24 hours
Loyal followers of German Retail Blog can't say we never try to surprise. On Tuesday we mailed you the first edition of RetailUpdate, our new English newsletter, just to see if you are on your toes and wide awake. As the name suggests, this free information product will update subscribers on the latest international retail news, while also covering the consumer goods industry. The service will be provided weekdays between approximately 8 a.m. and 9 a.m. Central European Time. The newsletter is essentially compiled by our international staff in New Zealand while most of Europe is asleep. The result of these efforts Down Under is a global news review for the first coffee in the office or for those sensible people who prefer breakfast in bed.
October 30, 2014
Martin Sorrell: "Even German food retail customers like brands"
We are living in a world awash with products. The global economy is generally sluggish; own label is on the rise in ever more fmcg categories; and the digital revolution continues to fragment the traditional media landscape. What then is the status of the brand? As parents of little children will confirm, the simplest questions are usually the hardest to answer. Put this question to an academic and he will bore the pants off you, ask a consumer goods manufacturer and you will be ladled with PR. Some cultural philosophers regard brands as lodestars providing shoppers adrift on a sea of information with points to steer by. Others even claim that premium brands have replaced religion in our modern consumerist world. But even agnostics might jib at the idea of Coke as a spiritual substitute for Jesus. Who then can one ask?
October 16, 2014
Happy tools specialist: Ian Cheshire (centre) opens Screwfix's first foreign store in Germany
Wake up German home improvement retailers, the Brits have come! Kingfisher Chief Group Executive Sir Ian Cheshire clearly believes that "Screwfix" has a good chance of success in Europe's richest country. Only four of these small 600m² to 1,000m² outlets opened in the Rhine-Main area on September 10, but they could be the thin edge of a very thick wedge. Along with French subsidiary Brico Dépôt, Cheshire clearly wishes the multi-channel concept to spearhead his international plans. Kingfisher, probably better known for its B&Q Big Box outlets, is already active in ten countries, including China, Russia and Turkey. Nearly half of group earnings are, however, achieved in France via the Castorama and Brico Dépôt banners, which Kingfisher hopes to supplement by the acquisition of Mr.Bricolage. With annual revenues last year of around €14bn, net cash in excess of €630m, and a stock market valuation that has more than doubled under Cheshire's tenure as CEO since 2008, the London-based plc is in an excellent position to invest further in western Europe. But why start the internationalisation of Screwfix on one of the world's hardest markets?
October 16, 2014
Harmless or harmful: Plastic toys have lost their innocence
Most people would agree that Lego is one of the most innocuous brands on the planet. In fact, the Danish toy-maker enjoys some overwhelmingly positive connotations: childhood, creativity, and imagination. The very name conjures up intelligent, well-adjusted kids playing with coloured plastic bricks while developing their manual dexterity and cognitive skills. Lego, like many others in the industry, also uses marketing agreements to promote sales, including one with oil giant Shell. But CEO Jørg Vig Knudstorp has just announced that the family-owned company will not be renewing its 50-year partnership with the oil giant after three months of relentless pressure from Greenpeace. In a devastatingly effective global campaign the environmental organisation has attacked the Danes for their association with the energy powerhouse. This has included a video on YouTube, showing an Arctic Lego landscape drowning in oil, viewed nearly six million times, as well as an online petition signed by more than one million people. How then did the Danish angel fall from grace? And could the brands who supply petrol forecourt shops be next to feel the wrath of the green warrior?
September 15, 2014
Proud bagpipers: Marching for or against?
As Thursday's hotly contended referendum on Scottish independence draws ever closer, German discounters active throughout the UK look set to profit whatever the outcome. At first blush, this may sound counter-intuitive for nothing will change if the Scots vote No to independence and Aldi and Lidl would retain their status as foreign investors in the event of a "Yes Scotland" decision. But both no-frills retailers could gain a number of brownie points with Scottish consumers after the referendum, if they continue to play their cards right. Wisely Aldi and Lidl, who are rapidly growing their local store count (currently 55 viz. 90 outlets), have kept out of the debate. Both have been content to let fools rush in where angels fear to tread. These do not only include David Beckham or Mick Jagger, who have little or nothing to do with Scotland, but also most of the big retail multiples from south of the border.
August 29, 2014
Date with a mannequin: A passer-by starts a smartphone dialogue
Feeling lonely in an ever more digitalised world? Don't despair, because soon you might be able to chat with storefront mannequins. Anyone with a smartphone strolling down Regent's Street in London's West End, for instance, can already use them for information purposes. Technology and design company Iconeme launched its "VMBeacon"-enabled mannequins in House of Fraser's Online Store (Aberdeen), Hawes & Curtis (London), Bentalls (Kingston upon Thames), and Jaeger (London) this month. The Bluetooth low-energy (BLE) beacons, installed directly into each mannequin or visual merchandising product, transmit information that has been programmed by the retailer. This enables customers to receive details via their smartphone about the clothes on display and allows retailers to engage directly with consumers who are shopping in, or passing by, a store. As customers are now just as likely to have a smartphone with them as their wallet, will the technology be a game changer?
August 28, 2014
Tesco goes discount: Is this how the UK grocer sees competitors Aldi and Lidl?
Tesco's roll-out of a discount aisle in its larger UK stores since early 2013 continues to puzzle trade observers here on the Continent. According to trade press sources, the retail giant has already introduced these "Brand Outlets" to c. 180 Big Box stores in poorer catchment areas and wants around 100 more by the end of this year. The dressed-down, matt-orange shelves carry a range of groceries, pet food, beauty goods and household products, including top brands such as Surf, Persil and Tetley. In keeping with the marketing claim "Big Brands, Small Prices", items range from around 30 pence to £2.50. As Tesco established a "£1 section" in 50-odd branches only two years ago, the media interpret these Brand Outlets as another attempt to combat the increasing popularity of 'pound shops' such as Poundland. If, however, the Brand Outlets are also trying to compete with Aldi and Lidl UK, then the whole exercise looks counterproductive.