October 2, 2020

Beating Mr Covid

colourful umbrellas in Rovereto (photo: Mike Dawson)
Creativity against corona: A colourful sight over the streets of Rovereto, where the locals refuse to capitulate to the virus, delighting both shoppers and tourists
Since February retailers and fmcg manufacturers have been challenged as never before in peacetime. They have risen to the coronavirus threat with feats of organisation and radical changes to their logistics. On the front line, store employees tread warily. Admin staff are now familiar with working from home. Some ask why they once commuted to the office every day. Even top managers question the vast carbon footprint they make by jetting around the globe when a videoconference would often do just as well. Lockdown, home office and furlough have accelerated structural change in the trade. As customers order more online, home delivery is becoming mainstream. Fear of infection has taken what little joy there ever was in shopping at mass retailers. A wave of small business closures has already begun to stoke unemployment and recessionary concerns. At all events, the feel-good factor is totally lacking among consumers. Anyone can draw a doomsday scenario, but ways out of the crisis are what really matters. So we asked a panel of international trade experts to find them...
October 1, 2020

Is it only price, price, price now in Italy?

Gunslinger (photo: armi1961/shutterstock)
Overkill: Most retailers see the lowest price as the ultimate silver bullet. But must they shoot from both barrels at once?
Price has always been an essential marketing mechanism in retailing. It is obviously now of paramount importance when consumers are worried about losing their jobs in a post-Covid recession. On a recent shopping trip to Italy, it was therefore not surprising to find grocers like Interspar or Coop Italia proclaiming how they have frozen their prices. They do this everywhere on store banners, shelf stoppers, and price tags. They don't even spare their organic food departments. This is great for customers, but is it really good for retailer margins? After all, only one player can be the cheapest in the same way that only one gunslinger could ever be the fastest in the Wild West. Or are we really in some Italo-Western where all that matters is to be the last man standing? In the pursuit of an answer there is little point in talking with a discounter whose whole raison d'être is price. But what about a full-assortment grocer like Spar Österreich, Austria's leading retailer by sales, with more than 570 hypermarkets and supermarkets in northern Italy? This is a grocer, who has always been about quality, and therefore with a reputation to lose. So we asked country manager Paul Klotz how dangerous he thinks it is for Spar Österreich to play the price game in bella Italia...
September 16, 2020

Opinion wanted: Yours!

Questionnaire (photo: Pict Rider/Stock.Adobe.com)
A good doctor regularly takes the pulse of his or her patients. The same applies to publishing. One can bore the pants off of one's readers simply by not covering the issues that concern them. This is a fatal mistake in a world where it takes just one click to unsubscribe from an online newsletter. But there is a simple journalistic remedy: Ask your own readers. As you belong to the elite group of individualists who subscribe to German Retail Blog, we are keen to discover more about your motivation as a reader. We should therefore really appreciate your answer to the following questions:
September 9, 2020

UK summer tour: Talk with Rita Greenwood

Rita Greenwood at William Grant (photo: William Grant)
Rita Greenwood: "Staying home with friends is becoming the new going-out"
Wid ye lik' a wee dram afore ye gang? In the last part of our UK tour, features editor Mathias Himberg spoke per video conference with Rita Greenwood, Regional President Europe, Middle East & Africa, at venerable Scots spirits maker William Grant & Sons. Their 'blether' ranged from drinking whisky in the time of Corona to the Sassenachs taking Brexit with their tea just south of the border. With consummate diplomacy, both even managed to skirt carefully around the thistly question of Scotch independence. With revenues of €1.4bn in 2018, William Grant is still quite a small laddie when compared with global Goliaths Diageo (€13.3bn) or Pernod Ricard (€9bn). But like David, the company packs something powerful in its sling: Glenfiddich, the world's largest single malt whisky brand by annual sales...
September 3, 2020

UK summer tour: Talk with Matthew Brown

Matthew Brown, owner and MD of Echochamber Ltd. (photo: LZ-Archiv)
Trend scout: Matthew Brown
In the fourth part of our annual summer tour, LZ features editor Mathias Himberg speaks per video conference with retail futurist Matthew Brown about the most important trends in UK and international retailing. Brown is owner and MD of London-based Echochamber, an independent trend intelligence consultancy with a global client list. This professional globetrotter normally tours the world around twenty times a year searching for new store concepts, ideas and best practices. So who better than him to go on a retail safari with? But we are still living in the time of coronavirus. Thus all mental travellers with a penchant for retailing must accompany us on the interviewer's equivalent of an augmented reality trip...
August 30, 2020

New in English: FOOD SERVICE International

FOOD SERVICE International (credit: FoodService)
FOOD SERVICE International "It's a great source of information for all things foodservice!"
May we draw your attention to the English version of one of our most influential and authoritative sister publications? FOOD SERVICE International provides global news for the HoReCa sector, which is intimately linked with retailing and the fmcg industry. For decades shopping centres, hypermarkets and department stores have profited from the customer frequency created by such illustrious names as McDonalds, KFC, Pizza Hut or Taco Bell. Attempts by retailers to go it alone have come to one conclusion: Gastronomy has to be done extraordinarily well with the flair of an Eataly if it is to create enough pull. Executed poorly or even only half-heartedly, the whole thing backfires. Top brands have also not been able to resist the sheer marketing power of food service concepts. Examples range from PepsiCo's former massive flirtation with fast food to Dr. Oetker, who intends to launch a first 'Pudu-Pudu' pudding shop in Venice Beach/California. Interested in this vibrant business segment which has been challenged as never before in the time of corona? Then check out FOOD SERVICE International, it's just a click away...
August 27, 2020

US online food retailers make a breakthrough

A Walmart self-driving delivery vehicle (photo: Walmart)
Walmart: The world's largest retailer is experimenting relentlessly with technology in order to find the Holy Grail of online retailing – a profitable food delivery business
When it comes to buying food online, America has long been a slow starter. Other economically advanced countries such as Korea and the UK have far higher penetration levels. This is puzzling when one considers that the US is home to Silicon Valley, Amazon, Instacart and God knows who else. The old argument that there is an awful lot of chimney pots in Seoul and London won't rub. There are also quite a few in New York City, Los Angeles, Chicago etc., if one cares to count them. This year, however, and despite what Citizen Trump may say to the contrary, the coronavirus has hit the land of the free harder in terms of total infections and deaths than anywhere else on the planet. In most countries, home office, furlough and short-time work have created a sudden spike in demand for door-to-door delivery or click & collect in the stores. But e-commerce sales in the States have positively exploded. So, is this a watershed moment for the US online grocery industry? We asked Bill Bishop, 'chief architect' at Brick Meets Click; retail industry consultant Michael Sansolo; and Jon Springer, executive editor at Winsight Grocery Business, for some enlightenment as to the new American normal…
August 27, 2020

Production almost back to pre-Covid levels

Supplier collage (photo credits: Studio Dagdagaz/Stock; Barilla; Paul Talbot; screenshot Carrefour)
Volume over variety: Was the motto for some food and fmcg suppliers during the height of the coronavirus crisis
Martial comparisons are generally best avoided. But, as in wartime, the coronavirus has brought out the best and the worst in people. We have had to endure black marketers selling protective masks and even basic foodstuffs at exorbitant prices, unprovoked attacks on vulnerable shop staff, and disinformation from the White House. Yet the crisis has also brought forth many unsung heroes. Selfless hospital staff serve their fellowman to the point of exhaustion. Others have volunteered to be human guinea-pigs in the search for a vaccine. Simple, hard-working people with their own families to care for have still found the time to shop for the old. Meanwhile the young are generally as feckless as they have ever been since time immemorial. They persist in 'hanging out' unmasked at super-spreader events. Marketers and sociologists have long tried to define them with such terms as Generation Y, Generation Z or The Millennials. Perhaps we should simply call them the Covid-19 Generation. Today's youth would not be so bright and gay if they inhabited a world of rationing with long queues for such basic commodities as pasta, water, milk or toilet paper. The fact that they don't is due to the tremendous speed and flexibility with which suppliers have met unprecedented spikes in demand...
August 20, 2020

UK summer tour: Talk with Ocado Solutions

Ocado home delivery scene (photo: Ocado)
Bringing the goods to your door: Ocado.com
On the third part of our annual summer tour, feature page editor Mathias Himberg spoke per video conference with Richard McKenzie, Chief Commercial Officer of Ocado Solutions. Parent company Ocado Group Plc, founded by former Goldman Sachs bankers Tim Steiner and Jason Gissing in 2000, is already the UK's largest online pure player. It has obviously been on a roll during the coronavirus crisis as the lockdown forced even the elderly to master the wonders of digital shopping. But there is more to this success than an unexpected windfall. Steiner now calls Ocado a tech company as well as a food retailer, which is why Ocado Solutions is forging corporate partnerships with global grocers...
August 13, 2020

Talk with Système U President Schelcher

A Super U supermarket (photo: imago images/Panoramic)
Successful format: Système U's supermarkets under the "Super U" logo have been riding the corona crisis very nicely, thank you.
There are grocers who boast. Others will overdramatise a specific point in order to gain a strategic advantage in the media over their competitors. There is also a rare breed of managers who speak so soberly that it takes a while to understand the significance of what they are actually saying. Dominique Schelcher, President of Système U, France's third-largest retailer cooperative, belongs decidedly to the last of these three categories. When, for example, our newspaper asked him whether the current wave of insolvencies and redundancies in France will make local consumers more price-sensitive, he quietly answered that "price will be one of the big themes when school starts again" on September 1. Friends, don't underestimate this, it means nothing less than a price war. Given the fact that Gallic retailers have already had to stem hundreds of millions of euros in coronavirus costs, there will be blood on the floor. And France will not be alone...