August 12, 2009

Media-Saturn challenges Best Buy

Roland Weise, CEO Media-Saturn (photo: Martin Hangen)
Wide world: Roland Weise throws down the gauntlet to Best Buy
Media-Saturn chief executive Roland Weise wants to oust US giant Best Buy from its position as the world's leading home electronics retailer. His optimism is buoyed by H1 results that have generally outfaced the current slowdown in the world economy. Media-Markt and sister company Saturn posted revenues of €8.7bn for the period – up 2.9 per cent. This surprising performance gives the lie to those pundits who had speculated that cyclical consumer goods businesses would be particularly badly hit in the global recession. But however one may admire Roland Weise's bullish stance and ambition, a closer look at Media-Saturn's international figures doesn't exactly underline his message. Weise wouldn't be Weise, however, if he didn't take issue with this statement in an interview with Lebensmittel Zeitung.
August 11, 2009

Tengelmann mulls new cuts

Karl-Erivan Haub, CEO Kaiser's Tengelmann (photo: Ludig Heimrath)
Karl-Erivan Haub: "Our supermarkets are not for sale"
Viewed over time, the Tengelmann story seems like a farewell in instalments. Less than two years ago, most of the former German retail giant's "Plus" discount stores were sold to rival Edeka. Now development manager Dr. Ulrike Biedeneck is said to have been charged with sounding out "options" for the group's 710 Kaiser's Tengelmann supermarkets. This story would at least have a certain logic on its side. With annual sales of around €2.5bn the Kaiser's Tengelmann outlets hardly provide enough critical mass for a potential buyer to compete with the big boys on Germany's highly concentrated market. Yet any such interpretation conflicts with a recent statement by Tengelmann CEO Karl-Erivan Haub. What then are we to believe?
August 10, 2009

Rewe Group exits Poland

Alain Caparros, CEO Rewe Group (photo: Rewe Group)
Rewe CEO Alain Caparros: "We want to be in the Top 3 wherever we invest"
It hardly came as a surprise. Rewe Group has thrown in the towel after 13 years in Poland – at least as far as its "Billa" supermarkets are concerned. Germany's second-largest food retailer has sold its 25 outlets to French retailer co-operative E. Leclerc for an undisclosed price, pending authorisation from the Polish cartel office. Annual revenues at Billa, predominantly based in the south of the country, are only around €100m. Rewe considered exiting the country in 2006; and rumours regarding an impending sale of Billa have been rife in the industry since spring. What went wrong between the Bug and the Vistula, and what is the strategic logic behind the move?
August 7, 2009

Organic farmer Howard Shapiro talks Mars, Inc.

Howard Shapiro (photo: Peter Allgaier )
Howard Shapiro: "Mars, Inc. believes in us!"
One wouldn't necessarily associate a man who looks like a cross between Dusty Hill of ZZ Top and Tolstoy with big, ballsy US corporation Mars, Inc. As founder of the seed company Seeds of Change, Howard Shapiro (63) became a leading proponent of organic farming in the US. But he caused a stir among organic farming advocates when he sold Seeds of Change to the world's tenth-largest food group in 1997. Shapiro has now virtually become the "green" ambassador of the US giant and says he wants to feed the planet. In so doing, he has traversed the long, dusty road from idealist-botanist and anthropologist to businessman-pragmatist. Has Howard Shapiro sold his soul to Mephistopheles? At all events, his appointment says a lot about recent changes at Mars Inc. (2008 revenues: $28bn; €19.5bn).
July 31, 2009

Aldi trials new corporate financing

Aldi in Manchester (photo: PlanetRetail)
Convenience in Manchester: Aldi is honing its money skills as it trades up abroad
Just a test? Aldi South has taken up a €200m promissory note. This may sound like peanuts to the Tescos and Walmarts of this world, but it could be the shape of things to come for Germany's leading discounter. In fact, we might be witnessing a major sea change within Aldi's financial culture. It could also accelerate the pace of this private company's international expansion. Apparently, Aldi South (Aldi Süd) considered the sale or sale & leaseback of part of its vast property portfolio last year in order to increase liquidity. Conditions on the local real estate market have since deteriorated. This has forced the notoriously secretive retail giant to look for new options as from the beginning of this year.
July 24, 2009

Aldi defends its prices

Aldi Süd logo
Law of economics: Aldi will always assert price leadership on its home market
Like big bad Lee Roy Brown, Aldi is not someone you should mess with lightly. It is one of the unwritten rules of German retailing that you don't try to undercut Aldi. Even Walmart learned this to its cost. For a while, Aldi will take some cheek from its smaller rivals. Then, when the reply does come, it takes away all hope anyone ever had of making a margin. So, like a giant sleeping junk yard dog, Aldi is best left unprovoked. Although the status quo remains unchanged, we have witnessed some strange happenings in H1. In a way never seen before, Aldi has reduced its prices every month this year. German price tracker records 135 price reductions at Aldi South and 110 at Aldi North between January and June. Many of these were KVIs. Usually, these moves by Germany's dominant hard discounter equate to increased customer footfall, market share and increased longer-term revenues. Surprisingly, however, this does not seem to have been the case.
July 24, 2009

German retailers weather the recession

Wolfgang Twardawa, Marketing Manager GfK (photo: Hans Pastyrik )
Wolfgang Twardawa: "The discounters shot their bolt too soon"
This is a smack in the eye for all Jeremiahs and Cassandras. In the worst world recession since the Second World War, German retailers & fmcg manufacturers are doing fine, thank you. In fact, they are, for once, in a surprisingly buoyant mood. The latest GfK Panel Services figures show that German food retail sales fell by only 0.5 per cent during the first half of this year. On a price-adjusted basis this equates to a gain of 1.5 per cent in H1. “Food retailers have increased their sales month by month since August 2008 on a price-adjusted basis,” confirms Wolfgang Twardawa, marketing manager at GfK. This is an encouragingly robust performance. And what a difference six months make! At the beginning of this year all was doom and gloom.
July 17, 2009

Lekkerland takes a hit

Stefan Punke, CEO Lekkerland (photo: Lekkerland)
Stefan Punke: "We're not happy, but we're mastering the situation"
Despite his smile for the camera, Stefan Punke, CEO of Lekkerland Germany, can't be a happy man. After all, the German convenience sector is going through profound structural changes. The leading delivered wholesaler is also deeply affected by developments on its home market which contributes a fifth of Lekkerland's European revenues (€6.7bn). Declining food sales are Punke's bugbear and they are already "significantly" lower than in 2008. He sees a number of reasons for this most unwelcome development, but the two main ones both begin with a "D": discount and department stores.
July 17, 2009

1st European convenience store conference

1st European Convenience Store Conference (photo: The Conference Group)
Premier event: The 1st European Convenience Store Conference will be held in Wiesbaden on 1st-2nd September
This is a must if you are into convenience. The 1st European Convenience Store Conference will be hosted on September 1-2, 2009 in the elegant town of Wiesbaden, near Frankfurt. Under the motto "Growing through the crisis – new opportunities for convenience concepts in Germany and Europe!" this inaugural event hosted by The Conference Group, will address the most important questions and strategies for success in the trade. Keynote speakers include Lekkerland CEO Christian Berner, Hank Armour, CEO of The Association for Convenience & Petroleum Retailing (NACS), Martin Orterer, executive sales director of Rewe Group, and Jacek Roszyk, CEO of Zabka Polska. Other international guests at the two-day international conference are Dr. Gordon Campbell, CEO of Spar International, Markus Laenzlinger, executive director of Migros-subsidiary Migrolino, Mike Greene, CEO of HIM UK, and Coca-Cola food service marketing manager Thomas Novak. See you there?
July 15, 2009

Delhaize bids adieu to Germany

Delhaize in Cologne (photo: Georg Lukas)
Very long test: After six years of losses Delhaize has finally thrown in the towel in Germany
Few could honestly claim they were surprised at the news. Belgian retailer Delhaize Group has sold its four supermarkets & convenience outlets in the Cologne/Aix-la-Chapelle region for an undisclosed price. The buyer: Germany's second-largest food retailer Rewe Group. Thus, Delhaize joins a dozen-or-so major international retailers who have failed to make it in Europe's strongest economy over the last few decades. The Delhaize stores were moderately attractive, but weren't able to generate enough customer footfall to compensate the generally low-price environment in German retailing. Only last year, Lebensmittel Zeitung asked Delhaize Group CEO Pierre-Olivier Beckers what was the logic behind entering a discount-dominated market ruled by a retail oligopoly. His reply: "Our starting point was to look for growth potential in areas where the geographical proximity to Belgium can leverage our store presence, scale, buying and systems etc. So, we first turned to Luxembourg and then looked at the western side of Germany." So a case of trial & error?