August 1, 2012
Sound option: For those who like to hear what they read
Dear newsletter subscribers & English-speaking friends of Lebensmittel Zeitung, Observant readers will doubtless already have noticed that we have celebrated the third anniversary of German Retail Blog by creating an audio version of our weekly texts. Interested users can either click the podcast sign at the end of each text or the "Subscribe to our podcast/iTunes" buttons on this site. Why have we decided to do this? Obviously, an audio version personalises the texts* and adds an extra dimension to our media product. Slightly to our surprise, we have found that German Retail Blog also provides a teaching service! Although most subscribers of German Retail Blog are from the UK and the USA, it is read by many Germans and other non-native English speakers from 180 countries who wish to improve their business and trade-related vocabulary.
July 31, 2012
Metro head office in Dusseldorf: A gentleman's club for the consultancy industry
Troubled Metro Group can't seem to get enough of consultants. According to trade union sources, Germany's largest retailer by annual sales has paid €260m in consultancy fees to McKinsey, Roland Berger, Bain, and Alix Partners etc. over the past years. Works councils and trade union Verdi are peeved. The McKinsey-driven restructuring programme Shape 2012 hardly seems to have kick-started the floundering giant: the jobs went, but the growth didn't come. Verdi computes that 19,000 jobs have gone world-wide over the last years. Meanwhile, Metro's latest consultancy-inspired project, "Foundation", aims to reduce personnel and material costs by a further €100m per annum. The company denies these assertions.
July 30, 2012
Die Zeil: Frankfurt's main shopping street
Frankfurt's so-called "Zeil" has more than 13,000 visitors an hour at peak times. According to real estate services firm Jones Lang LaSalle, this makes it Germany's busiest shopping street ahead of the Schildergasse in Cologne and Kaufingerstrasse in Munich. Overall, the number of customers visiting Germany's 170 most important High Streets has declined 6 per cent since last year. These figures surprise given that retail sales have been relatively robust in Germany despite the economic downturn in most of Europe. Experts therefore believe that lower customer frequency in inner cities has nothing to do with this year's poor weather. Instead, they point to an increase in online shopping and a tendency among younger consumers to take fewer shopping strolls.
July 26, 2012
Klaus Gehrig: "The European economic crisis is also a chance"
Schwarz-Gruppe is bringing home the bacon. The secretive discounter wants to hit €66bn in revenues this business year after making €63.4bn to the end of February 2012. "We are faring well and growing our like-for-likes throughout Europe," says Klaus Gehrig, CEO of group holding SUT. The operator of Lidl hard discount and Kaufland superstores admits that currency rates have been adverse in some countries. The thrifty Swabians therefore want to play it safe and will not be expanding into any further countries, such as the USA, for the time being. The one exception could be Serbia. Overall, however, Neckarsulm-based Schwarz Group has managed to profit from the European crisis as growing numbers of middle-class consumers become more price-conscious and start to shop with discounters.
July 23, 2012
Summer Olympics 2012: London in sports euphoria
Few on this planet will not wish the London 2012 Summer Olympics well. At best, they could inspire a generation of young people to health and fitness, regenerate a neglected part of London, and promote international understanding. The London Organising Committee of the Olympic and Paralympic Games, the delightfully eccentric Mayor of London Boris Johnson, and the UK authorities have strived to make the games as enjoyable and as safe as possible. Among other security measures, troops have been drafted into the metropolis on a massive scale and surface-to-air missiles stationed on rooftops. However, are retailers in London and other cities safe from a recurrence of the violence, arson and plunder witnessed on UK streets only last summer?
July 23, 2012
Paul McIlhenny: "We get offers all the time!"
It is unusual for the owner of a company to term his products "hot as the hinges of Hades", especially when the Queen of the United Kingdom has given them her Royal Warrant. Yet this is probably an understatement when referring to Tabasco. Hellishly hot or no, Paul C.P. McIlhenny, the 68-year-old Chairman & CEO of McIlhenny Company, has a lot to be proud of given that his family's pepper sauces dominate their segment in the US. Just because Tabasco goes down like a house on fire with Cajun food in local Louisiana, doesn't necessarily mean though that it will do so in Japan or Estonia. Apparently, however, it does.
July 19, 2012
Berggruen's executor in Germany: Karstadt CEO Andrew Jennings
Oh dear, it's started to happen already: former golden boy investor Nicolas Berggruen has made his loyal staff take the first sip of what is likely to prove a bitter cup. At the first possible moment — management hands were tied till now by insolvency agreements where staff renounced tariff wages for three years — two thousand full-time employees are to go at German department store group Karstadt. They are to leave by 2014 under the all-purpose banners of simplifying structures and greater competitiveness. Staff numbers were already decimated by about a third from 2006 to 2011. Around 2,000 full-time jobs fell to natural wastage during insolvency year 2009/10 alone. It seems to be the stock reaction of Karstadt management, whoever is at the helm: when revenues and earnings fall, staff are cut.
July 10, 2012
Didier Fleury: Runs real,- in eastern Europe
Metro Group's hypermarket subsidiary real,- is beginning to look like the late Roman empire — troubled within and under constant pressure to redraw its eastern borders. According to our sources, Metro could be considering ending the separation of real,- into a domestic and an international division as a possible preliminary to the sale of all Central & Eastern European (CEE) operations. (Last year "real,-" posted annual revenues of €11.2bn, a quarter of which was in the CEE region, on a meagre ebit margin of 1.2 per cent.) The same sources also indicate that both divisions could be united under top manager Didier Fleury, who has run real,- in eastern Europe since 2008. If this is true, it would seem an odd decision when one considers the need to be an insider here in Germany.
July 4, 2012
Germany's most trusted retail brand
Aldi’s vast, efficient and profitable business empire has always been German retail’s greatest exponent of hard discount according to first principles. Thus, despite the occasional mild flirt with listing brands, Aldi has essentially always defined itself via own label. This could be compared with a steady and loyal breadwinner, who has been married for decades, drinking an occasional espresso with a lady colleague in the staff canteen. Now that Aldi Nord (Aldi North) has joined Aldi Süd (Aldi South) in dalliance, however, shock waves are being felt throughout the industry. Both siblings are now actively sounding the market for further brands to list.
June 28, 2012
Matt Shattock: "We see a bright prosperous future as a stand-alone company"
This year has been a historic one for Beam, Inc. In October 2011, the world's fourth-largest spirits maker separated from Fortune Brands to become a publicly-traded company on the NYSE. The Deerfield/Illinois-based company has built on strong momentum in 2011 and posted double-digit top-line and bottom-line growth in Q1 this year. Like its major rivals, Beam finds Germany an increasingly attractive market. This is surely why Matthew (Matt) J. Shattock, President & CEO, was happy to talk on a visit to Beam Germany head office in Frankfurt. Beam, with global sales of $2.8bn last year, clearly considers Germany an investment priority. Given the Federal Republic's general saturation, stagnating population, and hard-discount-dominated retail market, this would seem a counterintuitive play.