January 20, 2012
Paul Foley: “What you absolutely don’t want as a retailer is for people to visit your store, look at the product, and buy it online elsewhere"
What's Paul Foley up to these days? This question has been spooking the trade for quite some time. Since his surprising departure as Aldi UK boss in 2010, after a long and successful career with the German discounter, Foley seemed to go completely off the radar. Then, out of the blue, this energetic Londoner suggests a meeting at his new office in Vienna. Foley and eastern European retail expert Peter Györffy are now two of five senior partners at CONplementation, a strategic management consultancy specialised in retailing. Foley, who has become something of an online convert, leads an internal project team dedicated to multi-channel retailing. They have conducted some revealing market research into the world of eCommerce and the online buying habits of consumers in western and eastern Europe. But can a discount veteran really become a cyber-freak overnight?
January 17, 2012
Forward view: Trade gurus scan the horizon
At the end of each year, German Retail Blog asks experts from the international retailing & the fmcg industry to guess what the future holds for the trade. A dozen or so pundits from banking to design were invited to answer the question "What do you see as the most exciting development in retailing/the fmcg industry and the most important challenge for the future?" As not even the brightest minds can reinvent the wheel, their answers logically point to known phenomena such as the growing importance of eCommerce, an increasing cost base, sustainability, the euro crisis etc. However, their comments go beyond a mere summary of the status quo and provide the interested reader with a chance to take stock in some highly intelligent company. As their replies are self-explanatory, they are given below without commentary and in alphabetical order:
January 17, 2012
Sam Dickson: "Quality, value, service and fairness can still be applied via an iPad"
Sam Dickson is Head of Brand Development & Product Innovation at Waitrose, probably the UK's premium food multiple. Waitrose operates 243 supermarkets, superstores and convenience stores in the UK and posted 2010 revenues of around €5.5bn. This makes it number six in the trade with a market share of around 4 per cent. Waitrose is probably the fastest-growing retailer in England and intends to nearly double in size by 2020. Like its parent company John Lewis Partnership, Waitrose is staff-owned and sets international standards for corporate democracy and the way it cares for staff. Its roots go back to 1904, and the first store under the "Waitrose" banner was opened in 1953. This seniority could make the grocer appear somewhat middle-aged to today's smartphone-toting generation of consumers. Indeed, Waitrose has been accused of being a Middle England shopkeeper for a "salt & pepper" clientele. So what is Sam Dickson doing to refresh the brand?
January 17, 2012
Land of contrasts: Modern self-service retailing is still the exception in India
A new twist occurred last week in the tortuous game of snakes and ladders India has been playing with international retailers. After much vacillation, the cabinet of the ruling Congress government has agreed to open up its retail sector to permit full foreign ownership of so-called “single-brand” stores. This means that Adidas, Ikea and Marks & Spencer etc. will be allowed to do business in the $450bn India without a local partner, provided they source at least 30 per cent of their products from local SMEs. The initiative towards liberalisation could speed Ikea’s plans to enter Asia’s third-largest economy. It will also strengthen the hand of Marks & Spencer, even though the UK fashion and food specialist wishes to continue with its local partner. The news won’t come as much comfort to “multi-brand” retailers such as Walmart, Carrefour or Tesco, though, with whom the government has been playing fast and loose for years.
November 25, 2011
Edeka logo: You can see it virtually everywhere in Germany, but nowhere else in Europe
In a very fast move, smacking a little of desperation, Jumbo Group clinched the purchase of fellow Dutch supermarket retailer C1000 yesterday. Multiple-cum-independent-franchise operator Jumbo paid €900m for 423 "C1000" stores making the combined company the second-largest food retailer in the Netherlands after Ahold-subsidiary Albert Heijn. Pending cartel office approval early next year, Jumbo's store base will grow to 725 outlets with annual retail revenues of around €7.5bn. Combined market share will now be 23 per cent compared with Albert Heijn's immense 34 per cent. C1000 already co-operates with Jumbo via Bijeen, a joint buying alliance created last year. Bijeen is now the third-largest purchasing group in the country after Albert Heijn and Superunie. So Dutch retailing has now become a two-horse cart race between market leader Albert Heijn and Jumbo/C1000.
November 17, 2011
Attractive interior: A C1000 supermarket in the Netherlands
Evidence is mounting that Edeka Group is in the second round of bidding for Dutch supermarket retailer C1000. The Hamburg-based retailer co-operative is believed to be offering between €900m and €1bn for a deal which could be concluded by Christmas. Edeka will have to outbid a number of rivals: Jumbo Group, Sligro Food Group, private equity companies Bain Capital and BC Partners as well as, possibly, Sperwer Groep (Plus). Edeka is Germany's largest food retailer with 12,000 outlets across a broad range of logos and formats. These include "E aktiv markt" and "E neukauf" supermarkets, "Netto" discount stores, "nah & gut" neighbourhood stores, and "Marktkauf" hypermarkets. C1000 stores are similar in size to Edeka's supermarkets and average 900m². They carry an assortment of around 11,000 lines, 2,000 of which are own label. But it won't be a marriage of equals.
November 10, 2011
Steve Esom: "We are not locusts"
Former Waitrose CEO Steven Esom joined the board of Marks & Spencer in 2007 to head food development. But the Englishman left his new employers after only one year in order to work as an investment partner for London-based private equity fund Langholm Capital. Esom thus belongs to the growing number of top retailers who have jumped saddle for the investment industry. A by no means exhaustive list of former CEOs or Chairmen who have already taken the high road to private equity includes Sir Geoffrey Mulcahy (ex-Kingfisher), Daniel Bernard (ex-Carrefour), Luc Vandevelde (ex-M&S), Sir Terry Leahy (ex-Tesco) and Andy Bond (ex-Asda). Clearly some of them had simply reached retirement, but the relatively young ages of Esom (then 47) and Bond (today 45) indicate that we are dealing with a broader phenomenon. So why has nice-guy Esom chosen the dark side?
November 2, 2011
Visionary investor: Maurizio Borletti at the Printemps flagship store on boulevard Haussmann
Maurizio Borletti is the personification of what the Germans call "old money". Cultivated charm belies his own description of himself as a "salesman". The Italian investor thus made a somewhat incongruous figure when he burst upon the German retail scene last year with a bid for insolvent department store chain Karstadt. In the event, he lost out to US-German investor Nicolas Berggruen in June 2010 after a highly-publicised bidding war. Is the co-owner of French department store icon Printemps on the acquisitions trail again in Germany? Market leader Metro Group has long wanted to sell its lacklustre Galeria Kaufhof department stores. But potential investors find the high price the owners are asking about as sexy as stale beer.
October 26, 2011
Andy Bond: "If I looked as a big foreign investor at Metro Group, I would first want to understand the exposure its formats would give to emerging markets"
Although he doesn't like the term because it sounds too self-congratulatory, polite and pleasant Andy Bond has become a business angel. After a distinguished career as CEO and later Chairman at Asda/Walmart, this northern Englishman surprised the trade by leaving the UK's no. 2 food multiple as per September 1 at only 45. He did so to create his own investment & management company, Woodcliffe Associates Ltd. It was certainly a bold and unconventional move that sets him apart from most other male top managers who cling to the seat of power far beyond their sell-by date. But why does a man running a group with estimated annual revenues last year of £19bn (€22bn), jack it all in so that he can promote small and medium-sized enterprises?
October 19, 2011
Markus Kaser: "We are not a big foreign group coming to Austria from who knows where"
If Asterix was a retailer and came from Austria rather than Gaul, he would be called Spar Austria (Österreich) and have his base in beautiful Salzburg. And should you want a local hero standing proud against foreign might (Rewe Group and Aldi in the form of "Hofer" from Germany), then think Interspar, Spar Österreich's hypermarket arm. In fact, Interspar's 66 first-class hypermarkets are rooted in home soil like stalwart pine trees. If you then desire a Managing Director that is as homely and authentic as the company he works for, then think Markus Kaser. Small wonder that Austria's second-largest food retailer plays the local card for all it is worth. Kaser is a retailer's retailer with a detailed knowledge of the stores and assortments. The main subject of this interview, the marketing magic of local and regional assortments, was therefore right in his neck of the woods.