December 22, 2016

A Christmas look at retailing in NYC and Europe

A Christmas drone (caricature: Oliver Sebel)
Santa goes cyber
In case you hadn't noticed, it's nearly Christmas and surely a time to be a little less formal.

One of the pleasures of being a journalist is the broad variety of people you get to meet. These range from bolshie trade unionists, blowing whistles and ranting about the evils of private equity, to sleek, narcissistic CEOs. Fortunately, there are positive exceptions in both categories.

One also has one's colleagues, who, as with most publications, include a remarkable number of eccentrics. Then there are some infectiously enthusiastic stringers, like Werner Prill and Christian Lattmann, who have just returned from whistle-stop store tours in New York City viz. Europe.

Both were astonished that we wanted to put their photos online as neither of them claims to be a professional photographer, but in our opinion the odd shaky or underdeveloped picture makes for authenticity. Want to have a peek?

Freelance filmmaker and Radio/TV moderator Werner Prill went to sample the Christmas atmosphere in the Big Apple. Where better to start than Macy's on 5th Avenue? At the world-famous department store he found a packed Santaland and Christmas World on the 8th and 9th floors.

Customers young and old were prepared to wait for hours to have a chat with Father Christmas. With his usual chutzpa Prill even persuaded a very busy Santa to greet our readers in English and German.

Eataly and the love of good food

Juice bar at Eataly in New York's World Trade Center (photo: Werner Prill)
Eataly: Fruit department with juice bar
Our former colleague was particularly impressed by Oscar Farinetti's Eataly fine food store in the new World Trade Center – so much so that has even made a film about his visit. Under the slogan "Eating is an agricultural act", this concept represents an attractive blend of artisanal food and quality gastronomy.

As Germans have recently found to their delight in Munich, Eataly is nothing less than a joyous celebration of good food.  

The experience is far superior to what most food multiples care to provide. Whereas many mass retailers seem quite happy in, for instance, the vitally important fresh produce arena to leave fruit to rot on plastic trays, Eataly presents its F&V in wicker baskets and within an ambience reminiscent of a street market stall. A juice bar and "free fruit for kids" provide the finishing touches, reinforcing the company's healthy, caring image.

Cheese counter at Eataly in the World Trade Center, New York (photo: Werner Prill)
Eataly: Cheese counter
Foods, such as parmesan cheese, are displayed en masse on the shelves, suggestive of nature's luxuriousness. Signs provide interested customers with detailed information about the suppliers and the regional provenance of the food, nurturing trust in the retailer and the integrity of its food chain.

If you go to an average self-service retailer, pasta is usually shoved towards the dry goods area and is presented in a completely uninspiring way with no attempt to create value-added. At Eataly, spaghetti and linguini etc. actually look like they want to be cooked and are displayed on painted white wooden shelving with plenty of cross-merchandising (tomato sauces, cooking spoons etc.).

Pasta display at Eataly in the World Trade Center, NYC (photo: Werner Prill)
Eataly: Pasta display
As befits one of Italy's leading exponents of slow food, even the 'on-the-go' convenience section is full of restaurant-quality prepared food with regional recipes using seasonal ingredients. "You can tell your dinner guests you made them. We won't tell," teases the company.

Given the often amateurish way many food retailers provide gastronomy, it is a joy to see it done so well at Eataly. Admittedly, not every store can look out onto skyscrapers in Manhattan, but the Italians are past masters at creating congenial dining spaces.

Eating area at Eataly in the World Trade Center, NYC (photo: Werner Prill)
Eataly: One of several eating areas at the World Trade Center in New York
Customers wishing to eat on site have a broad choice of reasonably priced meals and can watch them being prepared. Numerous flourishes, including an Italian delivery van, contribute towards a fun atmosphere.

But Eataly also wants its guests to take food seriously. This is evident in the 'foodiversità' section, which plays on the words food and università (Italian for university). Here customers can learn about food via participative seminars and lectures. Eataly calls this area a "Free University where we encourage you to play with your food".

In all, it must surely give the trade pause for thought that with Eataly we have yet another instance of how it has taken an outsider to teach food retailers to display and market food. Oscar Farinetti may be a marketing genius, but they should be humbled by the fact that he made his money in consumer electronics!

Christian Lattmann on tour in Europe

On the other side of the Pond, another stringer, Christian Lattmann, has just returned with a very mixed bag of impressions from his latest tour of European retailing. Although this veritable truffle hunter of retail stories is too much of a professional to draw general conclusions from a few ad hoc store visits, he was disappointed by many of the French hypermarkets he visited.

Géant Casino store sign in Annemasse, France (photo: Christian Lattmann)
Sign of the times: A Géant Casino hypermarket in Annemasse, France
These included such illustrious names as Carrefour, Géant Casino and Auchan. This is particularly surprising when one remembers how whole busloads of German retail managers used to cross the border in former years looking for inspiration from their French counterparts. They often came back full of admiration for the way French retailers displayed, for instance, fresh produce.

Significantly, Lattmann's criticism does not embrace retailer cooperative Leclerc who is essentially concentrated on its home market. As in Germany, the strategic advantages of a model where independents own their own stores are manifest.

One can only surmise why there has been a relative decline in the overall quality of French hypermarkets. Doubtless there are many reasons. These could include the old-fashioned l'état-c'est-moi management style of many French CEOs. However, the vast internationalisation of French Big Box operators since the 1970s has presumably also led to a chronic lack of investment in the home store base.

This tale, reminiscent of Tesco in the UK, has allowed the Germans to do a lot of catching up. In an increasingly online age it is a fatal error not to invest adequately in bricks & mortar. Why else should customers pay for petrol and face traffic jams?

Amazon locker, Auchan, Illkirch (photo: Christian Lattmann)
If you can't beat them, join them: An Amazon locker at an Auchan shopping centre in Illkirch, France
Perhaps this lack of inner conviction and belief in one's self as a destination retailer is reflected in the Amazon pick-up stations Lattmann found at the French hypermarkets he visited. Obviously the retailers concerned are trying to provide an extra customer service with their "commandez en ligne, retirez vos colis ici" (order online, pick up your parcels here) offers.

But have they really thought this capitulation to Amazon through, or are they only suffering from a mild bout of schizophrenia?

Lattmann's disappointment with Gallic retailing was not reserved for local players alone. Aldi North and Belgian retailer Colruyt are known to have some pretty scrappy stores in France, but German discounter Norma has some positively dreadful outlets there.

Norma France in Mulhouse (photo: Christian Lattmann)
A Norma store in Mulhouse, France: Cheap prices, cheap stores?
Admittedly, Lattmann praises the company's regional organic offer marketed under the slogan "Le Bio a une adresse" (organics have one address). In one particularly claustrophobic Norma outlet in Mulhouse, however, he found high shelves, dilapidated flooring, and aisles hardly wide enough to push a shopping cart through.

In Germany Norma has been very clever in occupying the niche left by the trading-up of Aldi South and North as well as Lidl. But, while Norma still seems to adhere to the increasingly old-fashioned discount mantra of looking cheap in order to underline a low-price message to the customer, its German stores aren't anywhere near as rough as some of its French ones.

The surprisingly high number of low-grade discount outlets across the border also explains why Lidl France continually emphasises its positioning as a "supermarché" (supermarket). Obviously Lidl doesn't want the French consumer to tar it with the same brush as local discounters.

Their negative image has even spread to the French-speaking part of Switzerland. At those sites where a perfectly good Aldi stands opposite a Lidl, Lattmann observed how the Aldi car park would be virtually empty while Lidl's would be invariably full.

XXL car parking spaces in Bern, Switzerland
Big is beautiful: XXL car parking spaces in Bern, Switzerland
As expected, Lattmann encountered some good hypermarkets run by Swiss market leader Migros. He liked a lot of their ideas including a self-service laundry with a coffee bar and XXL parking spaces for SUV owners for a small surcharge.

In Italy, Lattmann was generally impressed by retailer cooperative Conad and family company Esselunga. Given the higher market concentration in Germany, he was surprised at the number of regional hypermarket chains although they vary considerably in quality. Again, he was seriously underwhelmed by the Carrefour hypermarkets he found on the peninsula.

Lattmann even managed to locate Aldi's new head office in Verona, so we can now send a photo to anyone who doubts they are coming to Italy. Germany's most profitable discounter will have to do battle royal, though, with archrival Lidl. Many of Lidl Italia's ultramodern outlets already boast in-store bakeries and an assortment that includes both organics and 'free-from' lines.

Head office of Aldi Italia in Verona (photo: Christian Lattmann)
Ready for business: The head office of Aldi Italia in Verona
With the exception of MD, there would seem to be little real competition from locally-run discounters in terms of store quality. Operators such as D'più, Prix Quality, EURO Spin or iN's mercato look like slavish copies of the German discounters in the mid-1990s that have been frozen in time.

In his further travels to Austria, Slovenia and the Slovak Republic, Lattmann found one retailer consistently impressive: Lidl. "It is almost frightening how good they are in every country," he says. How times have changed! Only a few years ago, Aldi was the measure of all things and Lidl but a clone. Today the Schwarz Group subsidiary is the export champion of German retailing.

Corporate advertising at Lidl Suisse (photo: Christian Lattmann)
Awesome: A Lidl advertisement in Switzerland
Finally, Lebensmittel Zeitung wishes to make an official apology that we are unable to provide our readers with any reindeer or snow at the moment in Germany. In order to make amends, and as befits the season, let us therefore close with a delightful video clip from Swiss sweets maker Chocolat Frey, which seems to resonate with both young and old. It was filmed in a store of parent company Migros and can also be downloaded from YouTube: Der süsseste Weihnachtschor der Welt (The world's sweetest Christmas choir)


Should readers wish to contact either Christian Lattmann or Werner Prill for more photos and details of their store tours, we should be more than happy to forward your emails. Happy Christmas, everyone!


Podcast. Click arrow to listen to an audio version of the text:






German Retail Blog

Sign up for your FREE newsletter now!



Comments (Write a comment)

This is an English-language blog, please write all comments in English!
Thank you.

Your e-mail address will never be published or shared. Required fields are marked with *

stats