September 1, 2011

AH to go braves German convenience market

AH to go convenience store facade (photo: LZ-Archiv)
Coming soon to Germany: Ahold subsidiary Albert Heijn has opened 53 "AH to go" convenience stores in the Netherlands since 2001 (photo: LZ-Archiv)
After months of vague hints, CEO Dick Boer finally announced last week that Dutch retail giant Ahold will be exporting its "AH to go" convenience store concept. When one considers that Germany has been the grave of most foreign retailers this is a surprising move. A mere glance at the list of those who have failed miserably since 1977 does not bode well for the flying Dutchmen: Carrefour, Castorama, Coin/Oviesse, FNAC, Marks & Spencer, Promodès, Virgin, Walmart, Wickes and Delhaize Group. The clearest warning for Ahold must surely come from the latest flop provided by Delhaize. The Belgians, who had opened four "Delhaize City" supermarkets/convenience stores in Aix-la-Chapelle and Cologne, finally threw in the towel in 2009 after six years of losses. So why make the jump?
August 18, 2011

Biedronka boss da Silva talks Polish retailing

Pedro Pereira da Silva, CEO Biedronka (photo: Biedronka)
Pedro Pereira da Silva: "Polish consumers don't only want value-for-money, they also want value-for-time" (photo: Biedronka)
Pedro Pereira da Silva, COO of Lisbon-based Jerónimo Martins Group, could be excused for looking a little smug, if he so chose. After all, as country manager for Poland since 2000, this modest 43-year-old has forged discount subsidiary Biedronka (ladybird in Polish) into a market leader. Biedronka’s 1,700-odd stores only average 554m². But last year, the discounter made net revenues of around €5.2bn. It is this family company's compound annual growth rate (CAGR), however, that truly astonishes. Here in Germany, Schwarz Group discount subsidiary Kaufland is, rightly, considered to be a pretty mean machine. In Poland, Kaufland's compact hypermarkets recorded an impressive 16 per cent CAGR for the five-year period from 2005 to 2010. Yet even this is totally outclassed by Biedronka (29 per cent).
August 11, 2011

London's burning! Aldi, Lidl, Makro going?

Riot In Tottenham (photo: Beacon-Radio-Flickr)
Hoodies go shopping: Rioters outside an Aldi store in North London (photo: Beacon-Radio-Flickr)
A tragic four nights of senseless violence, looting and arson have just passed this week in the UK. Whatever may be claimed to the contrary, the real aim of the hooded underclass perpetrating these crimes was to plunder retailers, especially those carrying sports goods, entertainment electronics and alcohol. Thus the higher-profile victims have been HMV, H&M, Boots, JD Sports, Foot Locker, O2, Curry's, Argos, Orange, PC World, or Comet, and there have also been attacks on businesses ranging from Starbucks to a Jamie Oliver restaurant in Birmingham. JD Sports was targeted in almost every location – presumably because the specialist retailer sells recognised international brands of young leisurewear and trainers, to which the feral young thugs aspire to and beyond which many are incapable of thinking.
August 5, 2011

Metro Group out of shape

Dr. Eckhard Cordes, Metro CEO (photo: Georg Lukas)
Brave call: Despite a difficult mid-season Metro Group captain Eckhard Cordes has increased his investment in the club (photo: Georg Lukas)
For a company that gave us 'Shape 2012' Metro Group is looking a little sorry for itself of late. Wasn't the cost reduction and productivity growth plan meant to bring the world’s fourth-largest retailer more into line with the performance of its global retail peers? But business is often like life: when things go wrong, they all seem to do so at the same time. At least this is the impression one gains when reviewing the H1 results. This week, Metro CEO Eckhard Cordes was obliged to back-pedal on the 2011 revenues guidance (plus 4 per cent) he had given only this spring. Albeit against a generally difficult consumer market in Europe, group revenues grew by a mere 0.1 per cent to €31.3bn. Although ebit jumped by €41m to €410m, and Dr. Cordes adheres to his expectation of an annual ebit increase of 10 per cent, his statements failed to convince investors.
July 27, 2011

Joël Saveuse talks smaller Metro C&C stores

Metro C&C opening ceremony at Paris Bercy (photo: Metro Group)
Cutting edge: Joël Saveuse, CEO Metro Cash & Carry (left), opens the company’s second inner-city depot in Paris (photo: Metro Group)
In mid-June our newspaper received an oral invitation to the evening opening ceremony of Metro Group's second compact cash & carry depot in Paris. Intriguingly, there was no official written invitation to the ceremony or a fact sheet about the new store – only vague mumblings on the telephone about a "possibly exclusive" interview with Metro C&C director Joël Saveuse. The world's fourth-largest retailer clearly wished to create an aura of secrecy around the inauguration of its 92nd C&C outlet in France, one of 30-odd countries within its vast empire. The object of all this mystery turned out to be a Metro C&C outlet with a store surface of 2,780m² compared with the usual 6,500m² to 10,000m². So why all the hush-hush about "petit Metro" in the 12th arrondissement?
May 3, 2011

Prince Will, Kate & Sainsbury's Fresh Kitchen

Royal wedding (photo: Robbie Dale_Flickr_Creative-Commons-Lizenz)
Very romantic, but will they buy their sandwiches at Sainsbury's Fresh Kitchen? (photo: Robbie Dale_Flickr)
Over a million tourists caught the Royal Wedding fever last week and came to join the celebrations in London. Verdict Research estimates that the marriage of Prince William and Kate Middleton has boosted consumer spending in the UK by nearly €700m, of which €406m went on food & drink (champagne, cakes, crisps etc.). Many retailers returned the compliment and didn't open for business on April 29 until 1 p.m. in order to allow staff to celebrate. Much nonsense has been written about the damage to the UK economy caused by premier David Cameron's decision to hold the nuptials on a Friday. Admittedly, a royal wedding will not balance the budget. But given that retail makes up about 60 per cent of national GDP, the feel-good factor alone will do wonders for Brand Britain. Will this, one asks, also extend to Sainsbury's Fresh Kitchen, the first stand-alone gastronomy concept run by a major British food multiple, on 77, Fleet Street?
April 28, 2011

Tesco CEO Phil Clarke in penitent results mood

Philip Clarke, Tesco International CEO (photo: Mark Mackenzie)
Phil Clarke: "Our performance in the UK has been below par" (photo: Mark Mackenzie)
Tesco's preliminary results briefing for 2010/11 witnessed an unusually candid assessment from Philip Clarke. Initially, the new CEO of Britain's leading grocer expressed satisfaction at the strong group performance. That was more than understandable, given that revenues grew by over 8 per cent to £68bn (€76bn) and underlying profit before tax by more than 12 per cent to £3.8bn (€4.3bn). Clearly, also, is beginning to internationalise. But later the Tesco frontman did not pull any punches regarding a disappointing performance on the UK home market. "The tough economic environment cannot disguise the fact that our performance in the UK has been below par," he said. Clarke pointed to weaknesses in Tesco's clothing offer and a "samey" lack of innovation in home and electronic products. Little or no mention was made in the UK press, however, of one of the "six immediate team objectives" which Clarke has set the company, namely, the aim "to become a multi-channel retailer wherever we trade."
April 14, 2011

Investors demand sustainability from retailers

Czech Reusable bag (photo: Tesco)
Reusable bags: Tesco uses these in the Czech Republic to reinforce its sustainability message (photo: Tesco)
If Metro Group Chairman Franz Markus Haniel and CEO Eckhard Cordes ever want to reassure themselves that corporate investment in sustainability is worth-while, they only need to consult their in-trays at head office in Dusseldorf. Extracts from two demanding letters sent to both gentlemen by investors and seen by our newspaper are published below. Metro certainly takes the complicated and multi-facetted subject of sustainability very seriously and has charged Michael Innacker, Head of Communications, with overseeing its implementation. As he points out, a sincere commitment to sustainability issues can enhance corporate reputation among customers, staff and the capital markets. On the other hand, Wal-Mart seems to have become the favourite whipping boy of morally inclined investment funds, not so much because the US retail giant refuses to act, but because it seems loath to communicate properly. As Tesco has set standards internationally, we talked to Communications & Legal Director Lucy Neville-Rolfe on the progress the leading UK grocer has been making towards sustainability.
April 8, 2011

Beep, beep: Rewe Group's new store drive-ins

A Rewe Express drive-in (photo: Reinhard Rosendahl)
Pull up to the bumper, baby: A new Rewe drive-in (photo: Reinhard Rosendahl)
Will Germans be honking their horn when they next shop at Rewe? If they only have to go a few yards to shop in overstored Germany, why must they wait around at home for a delivery? And, as they love their cars nearly as much as the Americans, why shouldn't they want a drive-in? These or similar questions may have prompted Rewe Group to experiment with the store drive-in for online customers.
March 31, 2011

Mike Greene talks Tesco & convenience retail

Mike Greene, CEO of him! UK London (photo: Mario Vedder)
Mike Greene: "The more consumers order on the internet, the more top-up shopping there will be" (photo: Mario Vedder)
German retailers are increasingly testing new c-store concepts, and Rewe Group is the latest one to do so. Germany's second-largest grocer, plans to launch a 130m² convenience store format under the 'Rewe to go' banner in Cologne at the end of April. Of course, Rewe has dabbled in convenience before, but mostly abroad. For instance it runs 'Billa Box' neighbourhood stores in Vienna and the Czech Republic. Will superstore and discount operator Rewe be successful with the new concept in Germany? One way of answering this question is to look at how pioneering convenience store operators such as Tesco have fared in the UK since the early 1990's. Who better to explain this than British convenience guru Mike Greene, CEO of him! UK London?