August 15, 2019

LZ American summer tour: Talk with Facebook

American dog, LZ summer tour II (photo: Javier Brosch/Shutterstock.com)
On the second part of our annual summer tour, Lebensmittel Zeitung's feature page editor Mathias Himberg spoke with Carolyn Everson, Vice President Global Marketing Solutions, at Facebook. With its communication platforms Instagram and WhatsApp, Facebook is one of the world's largest internet companies. Founded by eternally preppy Mark Zuckerberg, Facebook has mainly used advertising to nearly quintuple annual revenues from $12.5bn to $55.8bn over the last five years. Net earnings have grown even more extravagantly from $2.9bn to $22.1bn during the same period. But what would any Silicon Valley tech giant be these days without a good old-fashioned scandal? Facebook has not failed us and has duly broken the 11th commandment: "Thou shalt not get found out."
July 26, 2019

Carrefour-Casino and the elephant marriage

Elephant marriage (photo: nattanan726/Shutterstock)
The mating of elephants is a surprisingly delicate business. These pachyderms are said to be exceedingly coy and, despite their huge size, take fright easily. The same would seem to apply to French retail giants Carrefour and Casino who are believed to have had a tiff on their first date last autumn. If trade gossip is to be believed, Carrefour CEO Alexandre Bompard and Jean-Charles Naouri, the main shareholder of Casino, met at the home of illustrious matchmaker Alain Minc. Both Bompard and Naouri are internationally renowned figures, but you probably won't know Minc. This is because 'le grand Alain' deliberately cultivates a low profile despite, or precisely because of, his legendary business and political contacts. One thing is for sure, though, you only do big things with Big Alan, and it is highly unlikely that the three gentlemen convened to play tiddlywinks. But did this trio ever get together at all? At least one of the parties involved claims that there was no such meeting, two of them have argued publicly as to who approached whom first. This is all very amusing and a field day for journalists, but doesn't really help us further. The whole matter can and should, perhaps, be archived under the title 'curious stories'. Over the last few weeks, however, speculation has again flared up in Parisian financial circles that informal contacts may have restarted...
July 4, 2019

LZ American summer tour: Talk with Google

American dog (photo: Javier Brosch/Shutterstock)
Despite Donald Trump, escalating trade wars and tough competition, the sheer size of the American retail market never fails to attract. According to the Food Marketing Institute, the US counts 38,300 stores, 4.8m employees and annual sales north of $700bn. America is also a melting pot of ideas and home to so many Silicon Valley innovators who have forged today's digital revolution. As part of our annual summer tour, LZ editor Mathias Himberg visited the land of seemingly endless opportunity. His first meeting was with Daniel Alegre, President for Strategic Partnerships in Commerce & Retail, at Google HQ in Mountain View, California. Their talk ranged from cooperation with French retail giant Carrefour to how the company entered online retailing and the potential behind voice-controlled systems. In 2018 the online behemoth posted sales north of $136bn. The lion's share (85 per cent) came from advertising revenues. Its cyberspace empire includes Google Maps and the video portal YouTube. Net profit came in at a staggering $30.7bn. The share price of Nasdaq-listed parent-company Alphabet, Inc. has been treading water since the beginning of the year but has nearly doubled since 2014. For some Google is a hero of the internet economy. Others criticise the online giant as an intransparent monopolist with a patchy record on data protection. Love it or hate it, there is no way around it...
June 7, 2019

Shanghai welcomes Aldi!

Aldi Shanghai, store front (photo: Andrew Meredith)
Store front
Thought our readers would like to see some photos of Aldi's first two stores in the People's Republic of China, which opened this morning in Shanghai. We also managed to glean a few statements from country manager Christoph Schwaiger in between paring the cheese, counting the olives, and swabbing down the counters. Meanwhile, if you go shopping there, don't forget to drop us a line...
May 29, 2019

Aldi gets physical in China

Aldi Shanghai at Jingan Sports & Fitness Center (photo: LZ Archiv)
Upmarket location: Aldi is celebrating its debut in China as a tenant at the Jingan Sports & Fitness Center
In only days from now Aldi will be starting business in the People's Republic of China. The German discount giant's first store will open in Shanghai on June 7. According to information obtained by Lebensmittel Zeitung, a further nine outlets will follow there soon. The first two sites, one of which includes a tenancy in the Jingan Sports & Fitness Center, are in noticeably prosperous neighbourhoods. Although Aldi is said to want to proceed cautiously during the pilot phase, our newspaper expects the medium-term store count to reach 50 to 100 in order to obtain the necessary economies of scale. Persons who claim to be familiar with the concept describe it as "more modern than company stores in Europe". Under the slogan 'Everyday value – Handpicked for you', the global discount pioneer will be offering a considerably more up-market proposition than at any of its other foreign markets. The convenience-oriented assortment will apparently feature many import goods from Europe, including the dairy products and cosmetics much loved by Chinese consumers. This represents a major departure from long-established company practice.
April 17, 2019

LZ Retailytics ranks Europe's Top 50 retail stars

Winner of the trophy (photo: Annette Shaff_Shutterstock)
Who won the European retail cup in 2018?
If this were football, Schwarz Group would be FC Barcelona, Real Madrid or ManUnited. The owner of German discounters Lidl and Kaufland has again won the European retail cup, as compiled by Frankfurt-based analyst platform LZ Retailytics, with whopping annual gross sales of €113bn in 2018. French giant Carrefour is still runner-up, but has continued to lose ground to Aldi. UK grocer Tesco, supercharged by the purchase of leading local wholesaler Booker, stays number four. German supermarket giants Edeka and Rewe thrive in fifth viz. sixth place. With the exception of Metro, whose sales were burdened by currency rates in Mother Russia, all eight German players in the Top 50 league have continued to grow, with five of them among the Top 10. In an industry that has become, for better or worse, a game of large numbers, this isn't particularly remarkable. Germany is, after all, the biggest market in western Europe. So were there no surprises in all this sexy trade data?
April 4, 2019

Lidl culls its bigwigs, but can't stop growing

You're fired! (photo: ojogabonitoo/iStock by Getty)
It used to be fun being one of the boss men, but not if you work at Schwarz Group these days. Klaus Gehrig, the mighty figure of power running the German retail giant founded by secretive entrepreneur Dieter Schwarz, seems to revel in home-made creative disruption. In increasingly frequent purges the 70-year-old corporate veteran regularly gives his top brass the chop, regardless of their sales achievements. No one is sacrosanct and no one is spared, if they question the general partner's structural changes. In an unmistakable power shift from operations to the consultative committee headed by Gerd Chrzanowski (47) at HQ in Neckarsulm, top managers are often obliged to vacate their offices so abruptly that no immediate replacement can be found. Only three weeks ago, Patrick Kaudewitz, CEO of hypermarket subsidiary Kaufland, had to make his goodbyes; now it is the turn of Jesper Højer, CEO of discounter Lidl, to say his sad farewells. Ignazio Paternò, a former head of Lidl Italia and currently deputy director of purchasing at Lidl Foundation in Neckarsulm, will assume Højer's role on an interim basis. The new supervisory body Schwarz Treuhand (SUT) is expected to make this arrangement permanent as early as this spring. But, at the current rate of survival, Paternò will last only two or three years. We all love to moralise and journalists more than most people. It would be immensely satisfying to write how the arbitrary ruthlessness of Klaus Gehrig is ruining the company for good and all. But this would create a false causality. In fact, with sincere apologies to both idealists and the tender-hearted, the very opposite would seem to be the case...
March 12, 2019

Could this be Brexit breakthrough week?

Brexit jigsaw (photo: destina_fotolia_109198388_M )
Brexit jigsaw puzzle
If all goes to chaotic plan, we are now only days away from a potential 'hard' Brexit. This will bring either freedom or Armageddon depending on your point of view. Many retail managers didn't want to talk about such a divisive subject for their customers and staff even off-the-record. This is understandable as much of the UK's current torment is completely out of their hands. Although we are convinced that Theresa May, Boris Johnson and Jeremy Corbyn are secret readers of Lebensmittel Zeitung, we also couldn't find a British politician who wanted to chat. This is most unusual for a generally loquacious breed, and we even offered them tea and scones. On the eve of three House of Commons votes this week, we therefore turned to a prominent legal-eagle in the hope of some enlightenment. One well-known commentator in both media and academia is Thom Brooks, Professor of Law & Government at Durham University. So we asked him to get out his intellectual machete and hack a path through the Brexit jungle for our readers...
March 7, 2019

Everyone wants to save Spanish retailer Dia

Spanish fire brigade (photo: Frantic00/Shutterstock)
Emergencia: L1 Retail evidently sees itself as part of Spain's retail fire brigade
Let us take a Ukrainian-born Russian oligarch and call him Mikhail Fridman. Let this self-made man set up an investment holding in London (LetterOne) with a retail arm in Luxembourg (L1 Retail). Let him invest €700m for a minority stake in Spain's fourth-largest grocer, Dia. Then watch the share price of this soft discount-proximity retailer crash by more than 90 per cent on the Madrid stock exchange within a year. How happy would you be, dear reader, if you were he, and what would you do to extricate yourself from this mess? Why, it's simple, stupid: Tell L1 Retail to make a bid for Dia, propose a rights issue of €500m, and replace the existing Board with the best international retail talent that money can buy. Then give your new dream team five years to effect a turnaround and wait for your paper losses to turn into profit. Sounds good, doesn't it? But life can be complicated, even for the rich and ruthless. There are shareholders and fiscal authorities to woo, stubborn board members to oust, and bankers to placate who could pull the plug on huge corporate debts. Worst of all, competitors, such as Lidl, Carrefour, Mercadona or Sonae, might make a counter-offer and start a bidding war. As Dia, whose 6,157 stores in Spain, Portugal, Argentina and Brazil posted €9.4bn in gross sales last year, awaits its AGM on March 19 & 20, will Stephan DuCharme, managing partner at L1 Retail, be able to fulfil his master's wishes?
March 1, 2019

A little peep at Ocado's proprietary technology

Robot carries parcel (photo: kirill_makarov Fotolia)
The future is already here...in Erith!
No, it's not Star Wars. Luke Jensen, CEO of Ocado Solutions, may be master over an army of robots. But, instead of going over to the dark side, these hard-working chaps will commission your online food orders in just a couple of minutes at one of the online retailer's three highly-automated giant warehouses. Our sky-walking reporter Sabrina Schadwinkel jumped on her space buggy for a short hop from Frankfurt to Erith, just a tad south-east of London, to have a look at Ocado's latest and largest so-called Customer Fulfilment Centre. Its two hives are each the size of three football pitches. When fully ramped up, they will have 750,000 storage locations managed by a swarm of more than 3,500 robots. The Erith site, with its chilled, ambient and frozen temperature zones, is expected to achieve annual sales north of £1bn. Nearly a third of this capacity will go to Morrisons, the UK's fourth-largest grocer by revenues. Given that Ocado has also just agreed a joint venture with British retail icon Marks & Spencer, let's have a chat with Mr Jensen on why international retailers should buy all this classy high-tech...