October 26, 2012
Marcel Corstjens: "Some industries can’t travel across borders as well as others"
Academics are always at their best when they challenge groupthink. Marcel Corstjens, Unilever Chaired Professor of Marketing at Insead, and Rajiv Lal, Stanley Roth Senior Professor of Retailing at Harvard Business School, seem to take almost mischievous pleasure in debunking retail myths. The latest holy cow they have attempted to slaughter is the globalisation of retailing. Admittedly, both men do not claim that there are no retailers who succeed internationally. However, they contend that internationalisation doesn't usually increase sales growth or profit margins for publicly-quoted grocery retailers. Despite their willingness to back their opinion with econometric analysis, this is a brave statement to make when top retailers such as Metro Group and Carrefour already operate in 30-odd viz. 40-odd countries.
October 19, 2012
Green disciple: CEO Marc Bolland is proud to call Marks & Spencer the "world's first carbon-neutral major retailer"
As mankind relentlessly continues along its path of self-destruction, future researchers from elsewhere in the galaxy will perhaps one day debate the timing of the so-called “tipping point” when the process of cooking ourselves became irreversible. Satellite photography reveals that the arctic ice cap has receded 45 per cent since the year 2000, and some experts estimate that it could disappear altogether during the summer months as early as 2016. Doubtless, alien historians will note with puzzlement that we had due warning of the catastrophe. The WWF computes that the human race is living as if we had one and a half worlds at our disposal in terms of resources. We Europeans are consuming enough for three worlds and our American cousins for five. Add another 2.5bn people by 2050, and most of us are in denial. “Why don’t we act?” asks Keith Weed of Unilever.
October 12, 2012
Phoenix from the ashes: A "Plus" store in Germany before its sale in 2008 to rival Edeka
Given its vast contraction in bricks & mortar, you could have knocked Lebensmittel Zeitung down with a feather when Tengelmann this week that it plans to open "Plus" stores in Russia. Up until the 90s, Tengelmann was one of the big boys in German and international retailing. But the family-run company then gradually imploded, leaving, for instance, A&P smashed by the wayside in the US. It also sold soft discounter "Plus" in Germany and eight other European countries in 2008. Today Tengelmann Group is only a regional supermarket player in Germany with holdings in DIY operator "Obi", textiles discounter "Kik", and Edeka Group discount subsidiary "Netto". It has also become an imaginative investor in numerous online start-up operations including Zalando. But why now Russia?!
October 10, 2012
Family Nestor: Wolfgang Gutberlet still holds a majority stake in Hessian superstore operator Tegut
Ah, the good guys have found each other at last in the bar and are negotiating an agreement as the publican calls for last rounds. For good guys read Tegut as seller and Migros Zurich as buyer, for publican read the German cartel office in Bonn. Foreign readers can be forgiven if they don't know Tegut as this family-run local hero is hardly known much beyond home borders in the Federal State of Hesse. If you want Tegut in a nutshell, think a medium-sized superstore operator whose 300-odd outlets of varying sizes carry an above-average percentage of organic food. Then add a slightly whimsical dash (meat is hung to classical music in order to improve the carma and quality). What? You don't know Migros either? Now that is a lack.
October 5, 2012
Experimental hotbed: M&S are testing many new online ideas at their Cheshire Oaks branch
True to its aims, World Retail Congress 2012 (WRC) was an insightful experience. Clearly, many UK and international retailers are experimenting with so-called “digitally-enhanced destinations”. These leading players are integrating their online offer within their stores in order to create an omni-channel experience for their customers. Surely, this is the way forward for physical retailers? At Marks & Spencer’s new Chester Oaks store near Chester, for instance, store customers can order from the company's entire catalogue at twelve “browse & order” terminals. With perhaps more than a side glance at Apple, these terminals have been deliberately designed in an attractive high-tech way. “Customers engage more if the screen is fitted to store design,” says online director Laura Wade-Gery.
October 5, 2012
Tesco CEO Philip Clarke: “The online and offline retail experience needs to be like a bespoke, handmade suit”
At this September’s World Retail Congress in London, one subject seemed to dominate top British retailer minds: online. This is hardly surprising in a country where ecommerce has a world-leading retail share of 9 per cent which could increase to 25 per cent by 2020. But how are still essentially store-based retailers coping with the challenge? Whether Tesco, Marks & Spencer or John Lewis Partnership, many UK retailers intend to ramp up their digital offers while integrating them more fully into their physical store bases. Becoming a truly multichannel retailer, however, is easier said than done on a home market in the grip of a double-dip recession. Increasingly digital-savvy consumers are ruthlessly comparing prices via mySupermarket etc., and half the clicks on Tesco.com are price comparisons.
September 4, 2012
Flag planters: Ahold veteran Albert Voogd and discount expert Jürgen Hotz (right) want to conquer Germany with "Albert Heijn to go" convenience shops
So now its official: Ahold will open its first German "Albert Heijn to go" convenience store next week on September 12. The Dutch retail giant has chosen Aix-la-Chapelle (Aachen), close to the German border, for its first point of call. A second shop is to follow in Essen later this year. The 80m² outlet in Aix-la-Chapelle is sited on a busy pedestrian street (Peterstraße 48). It will offer around 600 convenience lines, including coffee, tea and cocoa, water, soft drinks, salads, ready meals, snacks, tapas and sandwiches. An invitation to interview Albert Voogd, European VP New Markets, and Jürgen Hotz, General Manager Albert Heijn to Germany, at Ahold's new German office in Mettmann has one reaching for the thermometer, however. Given the saturated, extremely price-conscious and competitive nature of the German market, one could be forgiven for expecting signs of delirium.
September 2, 2012
Crown prince Alexandre Ricard on his inheritance: "Une machine formidable"
Pernod Ricard continues to thrive. In the year to the end of June 2012, the French spirits & wine group boosted global revenues by 8 per cent to €8.2bn. This represents the fastest rate of growth in annual sales since the recession in 2007/08. Net earnings also rose by 9 per cent to €1.2bn. Normally, such results would have been a cause for a celebratory glass of Perrier-Jouët. Sadly, however, they were overshadowed by the unexpected death of company Chairman Patrick Ricard (67). As from 2015, his nephew, Alexandre Ricard, will take up the reins of power as Chairman & CEO. In the absence of the charismatic patriarch, Thierry Billot, MD Brands, was so kind as to talk us through the results.
August 29, 2012
Zalando.de: Still looking to make a profit
This company may sound like a white rabbit with long ears which the magician pulls from a top hat at the circus. In reality, it is the wonder boy of German e-commerce. In less than four years, online shoe and fashion retailer Zalando has developed from a tiny start-up operation to a major category killer. The Berlin-based operation more than tripled net revenues to €510m in 2011, and the €1bn-sales mark could be hit this year. This stunning growth has been fired by massive investment in colourful TV spots and catchy online banners. Nielsen computes that Zalando spent around €90m gross in advertising last year, giving the brand a 95 per cent recognition rate among German consumers. Meanwhile, Zalando has rapidly expanded into new markets and categories. The internet “shoe-ting” star is now active in twelve European countries.
August 24, 2012
Pretty discounter: Aldi wants to dynamise its own label offer with top health & beauty brands
Macho Aldi is getting prettier as the cultural revolution at Germany's largest hard discounter gains pace. According to trade sources, the Alpha males at the top are in advanced negotiations with suppliers to list top health & beauty brands. To date, Aldi has generally had little time for brand magic and only stocks own label products in this category. Talks are said to be furthest advanced with Beiersdorf, the maker of Nivea skin cream etc. Other frequently heard names include top brand manufacturers L'Oréal, Henkel, Procter & Gamble, Colgate and Nestlé. None of the parties concerned cared to comment on these rumours except for Nestlé who denies the reports. But the retail giant clearly wants to add more punch to its health & beauty assortment.