August 7, 2015
Neela Montgomery: "Some of my businesses need corrective action, and you don't do turnarounds at a slow pace" (photo: Otto Group)
As a woman, Neela Montgomery, executive board member at Hamburg-based Otto Group, is regrettably still quite a rarity in German retail c-suites. But any gender talk obfuscates her commanding credentials for her important new task: the restructuring of Otto Group's most important business division, Multichannel Retail. A glance at her CV suffices. Montgomery is a veteran of world-leading Tesco.com and has worked for the UK grocer in a variety of senior management roles in a number of countries, including Malaysia. As such, the lady is a good fit at Otto Group whose 123 companies are active in more than 20 countries. Montgomery's new fief embraces group companies in Germany and abroad that sell their goods through catalogues, e-commerce, and in over-the-counter retail. The range includes fashion, footwear, lifestyle accessories, furniture, interior décor items, and toys, as well as technology, sport and leisure products. So what can the new girl on the block bring to the game?
August 6, 2015
Grant Winterton: "We regard Germany, France and the UK as emerging markets" (photo: www.scheffen.de)
If your company name is Russian Standard and you make vodka in St. Petersburg, then you are unlikely to have authenticity problems with local or global consumers. So it almost seems superfluous for the corporate website to market the Russianness of its premium brands. There we learn that its winter wheat comes from the Steppes; its quartz (used for filtration purposes) is taken from the Ural Mountains; and its spirits are blended with water from Lake Ladoga. Doubtless Global CEO Grant Winterton (45) would have preferred to have only discussed brand leadership in Mother Russia and the conquest of foreign bars and drinks tables. But even an Australian manager must accept that a business so quintessentially Russian cannot divorce itself entirely from manspreading Uncle Vlad and current West-East relations...
July 29, 2015
Goodbye barcodes as we know them: The POS of the future (photo: Digimarc/Stuart Mullenberg Stuphoto.net)
Roll up, roll up for a wonderful piece of retail magic – Digimarc will now make your bar codes disappear. What sounds like part of a David Copperfield show is apparently not magic at all. The Beaverton/Oregon-based company has come up with a way to make barcodes invisible and thus revolutionise what was once itself a revolutionary technology when the UPC was introduced 50 years ago. According to Digimarc partner and imager maker Datalogic, the new digital watermarking process could speed up scanning time by a least a third and therefore the whole checkout process at your local store. The innovation is currently being tested by Walmart in its innovation Lab 415-C and has been praised by CEO Doug McMillon, which in the retail world is akin to being knighted by the Queen. Wegmans already prints the digital watermarks on its own label products. "The technology allows scanners to immediately read from as many as 200 invisible barcodes all over, for instance, a box of cereal," says Digimarc boss Bruce Davis. This represents a great improvement on the conventional method of one barcode per package for 10m items world-wide. Davis is bullish about his new technology and also believes that checkouts could be eliminated entirely when shopping trolleys are equipped with scanners. This in turn could equate to substantial annual labour cost savings for the retailer. Sounds like a good ROI?
July 23, 2015
Christian Haub: "A&P helped us to really understand the US consumer market" (photo: Tengelmann)
The sad fate of historic and now insolvent US supermarket retailer A&P will provide students at Harvard Business School with study material for generations to come. It is certainly remarkable how the Great Atlantic & Pacific Tea Co., a household name in America with more than 15,000 stores, eventually crumbled into a small regional multiple only to file for Chapter 11 again this year. Although the Haub family exited A&P for good in 2012, their name had been inextricably linked with the company for over three decades. The owners of Germany's seventh-largest retailer Tengelmann Group have long gone on to pastures new and are currently reinventing themselves as an important investor in internet start-up companies. So theoretically they could just wash their hands of A&P and refuse to comment. However, our newspaper judged Tengelmann partner Christian W. E. Haub rightly in that he did have something to say about the fate of the proud company he once presided over.
July 9, 2015
Paolo Barilla: "You can't buy international experience at the supermarket" (photo: Barilla)
Barilla Group is living proof that more than ham comes from the delightful northern Italian town of Parma, which has been home to the Italian pasta maker since 1877. Vice-Chairman Paolo Barilla (51) is one of the three siblings who have majority control (85 per cent) of this privately-owned company. His older brother Guido is Chairman; his other brother Luca is a fellow Vice-Chairman. Having interviewed Guido Barilla almost six years ago to the day, it would seem that our newspaper is gradually getting to know the whole family. Admittedly, talks could have been more frequent as the brotherly trio has quite an entrepreneurial tale to tell. Like the three musketeers, they have had their fair share of bumps and bruises since deciding to go international in 1993. Shakespeare once wrote: "Experience is a precious jewel and it hath needs be so, for it is often purchased at an infinite rate." For the Barillas this infinite rate was the purchase of German baker Kamps at the inflated price of €1.8bn in 2002. So how come they still like Germany?
July 9, 2015
Heat-resistant chocolate: Melts in your mouth, but not in the shop window (photo: marcel van coile)
The current heatwave in northern Europe isn't too good for chocolate sales, which have plunged over the last few sweltering days by a staggering 30 per cent. But for researchers at the Global R&D Centre of Barry Callebaut in Wieze/Belgium the weather simply can't be hot enough. A few days back, our newspaper caught ten of them standing around two chocolate bunny rabbits as they watched with childlike glee how one melted under an infrared lamp at 38°C and their one didn't. But what looks like a scene from Sesame Street is really big business for the world's largest manufacturer of cocoa and chocolate products. The Zurich-based group already makes a third of its €5bn annual sales in threshold economies and wants to boost business with them. But when you market a product which is supposed to dissolve in the mouth, it is hardly suitable for most shop windows in Africa, Latin America or Asia. So thermo-tolerant chocolate could be the intriguing answer. Heat-resistant bunnies are, however, just one of the lines that Barry Callebaut has been able to create with unique functionalities. Although the company is loath to specify annual R&D spend, innovation is clearly a strategic enabler for future growth. In fact, an astonishing 70 per cent of all revenues are generated by products that have only been developed over the last five years.
July 3, 2015
Last resort for Greek consumers: While politicians and corrupt elites squabble, unpretentious Lidl offers the people a square deal (photo: LZ-Archiv)
As smirking Finance Minister Yanis Varoufakis plays Easy Rider on his motorbike and Merkel, Schäuble, Lagarde and Juncker look grimmer by the hour for the camera, the Greek tragedy unfolds apace. Nemesis here takes the ugly form of more than €320bn in unsustainable debt. Regardless of the outcome of the national referendum on the international bailout this Sunday, there is no doubt as to the protagonist: the Greek people. Forced to choose between the bitter cups of chaos or further decades of grim austerity, like the tragic hero of old, they seem damned whichever way they turn. It is an ill wind indeed, however, that blows nobody any good. The tormented country may be grinding to a standstill, but the 220 discount stores of Lidl Hellas continue to do a rip-roaring trade. So it must come as an irony for those Greeks who see the German financial machine as their oppressors that it is a German retailer who gives them the best bargain on the High Street.
June 25, 2015
Kingfisher CEO Véronique Laury: "Do It Yourself costs less" (photo: Thomas Goetz/EDRA)
DIY is dead, long live DIY! This could well have been the motto for this year's Global DIY Summit in London, organised by international trade organisations EDRA and fediyma. The two-day get-together of the great and the good in the industry provided an authoritative statement on the current state of repair in the global home improvement sector. Some of the daunting challenges facing the trade were revealed at the very start of the show via an electronic questionnaire. One in three suppliers and one in five retailers believe that the growth of online home delivery could force 70 to 80 per cent of all physical store space to close by 2025. A surprisingly high number of attendees also estimate that robots could replace 10 to 20 per cent of all shop staff by then. Meanwhile, younger consumers are becoming less interested and capable in DIY, which favours the "Do-It-For-Me" segment. This is good news for professionals and their wholesale customers, but it means that fewer tills will ring at the DIY store. Here even Sergio Giroldi, CEO of German market leader Obi, admits: "Big box stores are too far away from today's customers." So why were the speakers so bullish?
May 14, 2015
Colony in commotion: Who is the king of Majorca? (caricature: Oliver Sebel)
Feel like a cheap and cheerful break this summer in Majorca, but worried about the money when you're there? Want to drink bucketfuls of sangria with a straw to droning music and pass out under a palm tree without a thought as to what your hangover will cost you? Need to protect your lily-white northern skin from going lobster-red with a suntan lotion that even the mass tourist can afford? Or do you simply require a towel to claim territory on the beach? Don't despair because as from next week Aldi will be there! According to our generally impeccable sources, the secretive German discount giant intends to power away on the Mediterranean holiday island in order to catch up with arch-rival Lidl who has already opened 14 outlets. Aldi wants to kick off with six stores next Wednesday and have a further four up and running by the end of the year. Benvingut (Bienvenid) a Mallorca!
May 7, 2015
Brian Sharoff: "I have helped to direct the battle between A-brands and retailers" (photo: PLMA)
Mr. Own Label, Brian Sharoff, is delightful company and hasn't lost either his wry New York humour or his puckish grin over the years. Sharoff's long tenure as President at the Private Label Manufacturers Association is a true American success story. Under his dynamic and entertaining leadership since 1981, membership has steadily grown from 200 companies to more than 3,500 today. Annual PLMA trade shows in Amsterdam (May) and Chicago (November) have long become a must for the retail & fmcg industry. In the run-up to this year's fair in Amsterdam on May 19 & 20, our newspaper wanted to know how this man built the PLMA into the force it is today and why, at a very indefatigable 68, he now sees the future in video streaming services?