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 international fashion, advertising and food service industries 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 of most Germans to the UK's June 23 referendum on continued EU membership. 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. This said, there has always been a strong groundswell of public opinion against membership since premier Ted Heath marched the country into Europe 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 riverside apartment blocks 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.
January 28, 2016

Aldi crosses the Alps, Lidl arms, Penny freezes

Italian ice cream seller (photo: Scusi/Fotolia)
Dolce vita for half the price: Aldi is set to open in Italy this year
Soon Robert De Niro won't be the only one talking Italian. Managers at Aldi, Germany's most profitable discounter, are learning the lingo quick so that they can open up shop south of the Alps this year. And when they do, there is likely to be a battle royal on prices throughout the peninsula for the hearts, minds and pockets of Italy's 60m consumers. Lidl Italia, with a head start of 25 years, will surely sharpen prices in defence of its role as the country's leading discount gladiator. This will only put more pressure on number four player, Rewe subsidiary Penny. Meanwhile, rumours abound as to how Aldi intends to conquer sunny Italy. Country manager Max Hofmarksrichter is believed to be negotiating the purchase of a distribution centre from local Coop Carniche in the north-eastern region of Friuli Venezia Giulia. And sources close to industry federation IBC claim that Aldi has been actively recruiting staff in the Triveneto area since December. True to form, parent company Aldi Süd (Aldi South) refuses to comment. All we know for sure is that expansion into Italy is being actively coordinated via Austrian subsidiary Hofer and that head office is in Verona. Currently, the 4,800m² premises are undergoing refurbishment. The real question, of course, is whether Aldi intends to start from scratch when Lidl has already built a substantial empire with more than 11,000 employees, 570 stores and estimated annual revenues last year of €3.6bn.
January 22, 2016

Walmart, Aldi, Lidl and staff cuts at Asda

Asda store celebration of 50th anniversary (photo: Asda)
50th anniversary: But, as fresh waves of redundancies batter the workforce, will there be any staff left to celebrate the next one?
Only a few days ago, Andy Clarke, CEO of Asda, the UK's third-largest grocer by sales, spoke somewhat ominously of "turbulent times" ahead and another tough year with "massive pressure" on supermarket operators. Staff are now learning what exactly he meant by this. According to the UK media, 200 senior management positions were eliminated on Monday with around 600 more still under review. Estimates vary widely, but as many as 1,000 jobs could be at risk at both HQ and store level in a major reassessment that has the potential to affect up to 5,000 staff. This bloodbath follows a cull of 1,360 jobs in the shops last July. But the power to sack provides only fleeting gratification to those in command. Customers begin to complain about a lack of service, and management talent will drift to competitors. Constant fear of redundancy may make employees pleasingly subservient to dominant execs, but it seldom fosters creativity or entrepreneurial spirit. With a motivational flourish that will surely have old Sam Walton, founder of US parent company Walmart, 'a rolling in his grave, the UK media also report that Asda now plans to scrap all canteen facilities along with vending machines and free cups of tea and coffee. What, one wonders, is next?