May 10, 2012

Regional multiple Bünting launches online shop

myTime.de, Bünting online delivery service (photo: myTime.de/Thorsten Helmerichs)
German pioneer: Bünting staff in one of the company's "Famila" stores pick food for the new myTime.de online shop
Sometimes small can be beautiful, but in the world of mass retailing, where God is generally on the side of the big guns, it is usually clobbered. All those who like to support the underdog must therefore hope that Bünting will succeed with its new online shop. Bünting who? Yes, gentle international reader, Bünting. On 23rd April, this regional multiple based in Leer/East Friesland was the first German bricks & mortar retailer to open an online shop with a national delivery service. Even more surprisingly, the choice of just under 25,000 grocery lines will span 18,000 food items, including fresh produce, as well as kitchen-related non-food and health & beauty products. One must savour this news slowly in order to appreciate its merits. Not Germany's national food giants, Edeka, Rewe or Metro, but a regional SME is offering a superstore assortment via the internet.
May 3, 2012

Supermarket in a smart phone

Tesco Korea, scannable posters (photo: Tesco)
Shopping while you wait: Commuters in Seoul order Tesco.com products with their smartphones
You have to hand it to Tesco; they are one of the few big international retailers who understand that consumers want to shop anywhere, any time. When the rumour hit the internet last summer that the UK's largest grocery multiple by sales had created a virtual shop in a metro station in the South Korean capital Seoul, few were prepared to believe it. The idea that shoppers would order products online while waiting for the train or bus on their way to work seemed implausible to say the least. That they would use their smart phone to scan quick response (QR) codes off product placards in order to pick their orders up from local Tesco stores on their way back from work, or have them delivered home the same evening sounded, more like science fiction than real-life retailing. Tesco didn't exactly help by narrating an Abyssinian shaggy dog story that it was all a mistake and just a clever marketing gag fabulated by an overambitious advertising agency determined to win the Cannes Advertising Festival prize. We now know differently.
April 26, 2012

Lidl's moral dilemma in Greece

Lidl Greece store facade (photo: LZ-Archiv)
Under Greek fire: Local politicians accuse Lidl of overcharging for own label products
In ancient Greek tragedy the hero's moral dilemma often consisted in being damned if he did and damned if he didn't. Worse still: his primary virtue contained the seed of his nemesis. 2,500-odd years later, Lidl, who has opened 230 stores since entering Greece in 1999, faces a similar situation as the bankrupt nation teeters on the verge of a financial and economic precipice. The Neckarsulm-based company is currently under attack from national authorities who claim that it is selling own label products at excessive prices. In the wake of a growing wave of anti-German sentiment, local media have indicated that the authorities are preparing to take legal action. Various local internet platforms portray Lidl as a greedy carpet bagger eager to enrich itself at the expense of Greek consumers bleeding in the national debt crisis.
April 19, 2012

Tesco's carbon footprint

Tesco's carbon footprint (photo: The Grocer)
Footsore: In four years, Tesco has labelled less than one per cent of its assortment with carbon footprints
Tesco is generally recognised as a forerunner when it comes to carbon footprint product labelling. But the UK's leading grocer by sales seems to have gone a little lame on what former CEO Terry Leahy had intended to be a triumphant marathon. Over the last four years, Tesco has only managed to research 1,100 lines and to label around 500 on an average assortment of 70,000. Against this backdrop, Professor Simonetta Carbonaro, CEO of REAL_Ise Strategic Consultants, and Dagmar Bottenbruch, Board Director at FLO-CERT, the certification arm of Fair Trade, dispute the usefulness of CO2 labelling. Both international sustainability experts give the whole idea a thorough bastinado.
April 12, 2012

Talk with retail grandee Luc Vandevelde

Luc Vandevelde, Change Capital Partners (photo: Change Capital Partners)
Luc Vandevelde is one of a growing number of former top retail managers who have made their way into the lucrative world of private equity. The former Chairman of Marks & Spencer and Carrefour founded private equity fund management company Change Capital Partners (CCP) in 2003. The London-based business invests in medium-sized consumer goods companies and retailers throughout Europe. Vandevelde (61) is thus in an excellent position to compare the very different worlds of the Plc and the private equity-financed mid-cap. This polite, polyglot Belgian is modest about his own achievements and stresses the importance of fellow MDs Roger Holmes, Steve Petrow, and Stephan Lobmeyr. He also feels that the title of CEO should be translated as "Chief Enabling Officer“ rather than as "Chief Execution Officer“.
April 5, 2012

Talk with Alliance Boots boss Stefano Pessina

Stefano Pessina, Executive Chairman Alliance Boots (photo: Alliance Boots)
Stefano Pessina: "I'm not driven by money, glory or compliments!"
This interview had to start with Schlecker. After all, Germany's third-largest drugstore operator, which filed for insolvency in January, is looking for investors. And who better than dealmaker Stefano Pessina? The Italian billionaire is Executive Chairman and joint owner of Alliance Boots, Europe's largest pharmaceutical wholesaler and drugstore multiple. This behemoth was created five years ago when he and US private equity partner Kohlberg Kravis Roberts (KKR) took Alliance Boots private after the merger of chemist-cum-drugstore multiple Boots in the UK and Anglo-Italian pharmaceuticals wholesaler Alliance Unichem in 2006. So is Pessina interested in making a bid for Schlecker and, while we are at it, could he buy DocMorris, the online service of German pharmaceutical wholesaler Celesio?
March 29, 2012

New Metro CEO Olaf Koch offers culture change

Olaf Koch, Metro CEO (photo: Metro Group)
Olaf Koch: "We don't want a top-down culture anymore"
Can it be that we now have a down to earth, non-arrogant boss at Metro Group? New CEO Olaf Koch certainly wants to revolutionise corporate ethos. The 41-year-old former IT expert will need to act fast though if Germany's largest retailer/wholesaler by sales is not to be pushed down the ranking ladder by rival Schwarz-Gruppe (Schwarz Group) this year. Already in 2011, Dusseldorf-based Metro Group posted annual revenues of €66.7bn compared with around €64bn at Schwarz Group. This is surprising because Metro holds a number of trump cards. As a plc it is able to tap the capital markets more easily; the group can diversify risk and seize chances across a broad store portfolio; and its main cash & carry division is not highly capital-intensive and spans both stable western European markets and higher-growth ones in eastern Europe and Asia. Regrettably, however, Metro has been embroiled in family squabbles among shareholders and top management, resulting in a 40 per cent decline in the share price last year.
March 22, 2012

German retail top dogs

Dennree (photo: Dennree)
Biggest gainer: Natural & organic supermarket operator Dennree grew faster last year than any other German retailer
Who were the winners and losers in German food retailing in 2011? A glance at Lebensmittel Zeitung's Top 30 ranking list, compiled by market research company TradeDimensions, reveals all. One thing is for sure, Germany is currently an Isle of the Blessed for local retailers who have not had to contend with the severe recessionary problems of their European counterparts. Last year, Germany's food retail universe increased by 1.8 per cent to a whopping €228bn. This may represent a decline in the growth rate compared with 2010 (+2.3 per cent), but it is still the second positive year in succession. Already high concentration levels continued to increase slightly. The Top 30 players now make up 97.5 per cent of the total market, and smaller operators such as Ratio have disappeared from the ranking altogether.
March 16, 2012

Adieu Carrefour CEO Lars Olofsson

Lars Olofsson, CEO Carrefour (photo: Carrefour)
Lars Olofsson: "I think it better to leave the answer to your question to the new team"
Departing CEO & Chairman Lars Olofsson was gently licked by retail analysts and financial journalists in Paris last week following his presentation of the Carrefour's annual results for 2011. Despite a 13.6 per cent reduction in net debt to €6.9bn, and above-target cumulative cost savings of €1.5bn, they should have savaged him like pit bulls. After five (!) profit warnings last year, ebitda at the French retail giant declined 11.3 per cent to €3.9bn. Net income "affected by significant one-off elements" fell by 14.3 per cent to €371m. Meanwhile net sales remained virtually stagnant at €81.3bn (plus 0.9 per cent). Ominously, Olofsson attributed these figures to “external and internal problems”.
March 9, 2012

Walmart ante portas

Juan Roig, CEO Mercadona (photo: Mercadona)
Mercadona CEO Juan Roig: Is he being courted by Walmart?
Sometimes it is hard to believe one’s own research or what informants are telling you: Walmart would seem to be actively negotiating a return to Western Europe. According to reliable and independent sources, the world’s largest retailer by sales is in talks with Spain’s leading retailer Mercadona as well as with Italy’s foremost hypermarket operator Esselunga. One also hesitates to print, when Mercadona’s head of press denies the above (“You are barking up the wrong tree.”), Walmart, as usual, refuses to comment, and no answer has been received from Esselunga to date. As, furthermore, Lebensmittel Zeitung’s sources do not wish to be named, it is only possible to assess how probable the above story might, or might not be, and to explore the potential logic behind any such discussions.