April 27, 2017
Enter the dragon and bring on the girls
It was some Grand Opening in Shanghai this Tuesday. Five weeks after the soft launch, Aldi Süd (Aldi South), Germany's most profitable discounter, officially presented its new online shop to the People's Republic of China. No pains or expense were spared for the official ceremony at the Waterhouse in Shanghai. The gentle-voiced and incredibly popular, local singer Chen Kun had been recruited for the occasion. Perhaps a little incongruously for a retailer whose initial offer only includes 100 own-label food lines, the audience were also treated to a fashion show where young ladies with willowy bodies strutted their stuff on the catwalk. Of course, it could all have been just a glamour item, but perhaps the privately-run retail giant is hinting at introducing its successful fashion collection to the Middle Kingdom? At any event, when one considers that Aldi has opened an office with 40 staff in the centre of Shanghai and a big distribution centre in the port of Ningbo, its cooperation with Alibaba B2C platform Tmall Global looks far more than a toe-dipping exercise in the South China Sea. And as journalists we can only exult because the low-profile retailer authorised country manager Christoph Schwaiger to talk with Lebensmittel Zeitung.
April 12, 2017
The heinous and cowardly terrorist attack in the heart of the Swedish capital last Friday was above all things a crime against humanity and another sad chapter in man's seemingly limitless capacity for inhumanity towards his fellow man. As with the hostage-taking at the Westgate Shopping Mall in Nairobi in September 2013, this tragic event regrettably also has a retail context. A hijacked lorry was first deliberately driven at shoppers on Drottninggatan, Stockholm's busiest shopping street, and then into Sweden's largest department store Åhléns City. All responsible retailers will therefore again be asking themselves what more they can do to protect their customers. Few, understandably, wish to discuss their security measures in public. We therefore asked Will Geddes, CEO of International Corporate Protection in London, for his advice on enhancing retail security.
March 9, 2017
P is for pasta, A is for Aldi
Mamma mia! Fruitbook Magazine has actually flown over Aldi's first distribution centre in Italy and shot some photos. The site in Oppeano, 20km from the centre of Verona, is still under construction. But, as the picture taken in mid-February below shows, the German discount giant is well on the way to setting up shop in Venetia. One real estate developer tells us that Aldi is already searching for another DC of around 60,000m² to the south of Milan. Luigi Rubinelli, managing editor of RetailWatch, believes this could be in the vicinity of Piacenza. He also says that Aldi has just signed the lease on a first store in Merano. True to form, Hofer, Aldi South's Austrian subsidiary responsible for group expansion in bella Italia, remains tight-lipped. This gives free rein to speculation on how big the company wants to become south of the Alps. So what have we been able to piece together for our readers so far?
March 9, 2017
Will Kaufland stock Crocodile Dundee hats in Australia?
"Strewth, cobber, another one's coming!" This, or similar, could be the reaction of Crocodile Dundee on hearing that German discounter Kaufland will be arriving soon in Oz. The Schwarz Group subsidiary and Lidl sister company has confirmed that a feasibility study on market entry has "already made considerable progress" but refrains from giving a specific starting date. The low-profile retail giant, with 1,230 compact hypermarkets in Germany and six Central & Eastern European countries, needn't be so coy, however. An increasing number of its top brass have been seen returning from Australia with a suntan of late, and we are happy to reveal that the corporate HQ will be in Melbourne. A glance at Kaufland Australia's new website (www.kaufland.com.au) confirms that they are already actively recruiting for a "letting manager". The company is also searching for locations with a minimum plot of 10,000m² and a preferred size of 15,000m²-20,000m², including 200 to 300 parking spaces. Want to know more?
March 1, 2017
Sign of the times: Out with the old and in with the Asian online new
Women can fascinate by changing the way they look every day, if they so please, but big retailers are under a different set of constraints. Tinkering with the corporate logo can be a dangerous game because customers generally expect consistency from their local shop. Small wonder then that grocers generally opt for a conservative approach when it comes to design and optics. In the past, few retailers were more conservative than Aldi Süd (Aldi South), but the German discount giant has become noticeably more adventurous on its home market over the last two or three years. The new buzz is multifacetted and can be seen, for instance, in plans for an online shop in the People's Republic of China this spring. Soon shoppers in Old Europe, Donald Trump country, and Oz will also be greeted by a company sign worthy of our exciting new cyber age.
February 16, 2017
Kickstart: Will Lidl speed growth in the US with an acquisition?
It is doubtful whether Donald Trump knows Lidl, and it is unlikely that Melania or Ivanka will ever go shopping in one of its no-frills stores. But, if the US president-in-tweet really means what he says about American jobs and putting more spending money in the pocket of the Average Joe, then he should be one of the very first to welcome the German discounter. We now know that Lidl will enter the US this summer, at least six months ahead of schedule. Twenty stores are planned for Virginia, North Carolina and South Carolina in a first wave and up to 100 outlets across the East Coast by mid-2018. This will create around 4,000 new jobs over the same period. That's quite a bold start, but it took arch-rival Aldi 40 years to become even America's 20th-largest retailer. So, if Lidl doesn't want to wait most of this century before it joins the US big league, could the company go an a buying spree?
February 3, 2017
Metro Group: Run by a succession of portfolio managers masquerading as retailers
Next Monday the long-suffering shareholders of Metro Group will be asked to rubber-stamp management plans to split the German retail giant into two separate public limited companies. Weird-sounding "Ceconomy AG" will then soon house Europe's largest entertainment electronics retailer, Media-Saturn, while niftily-named "Metro Wholesale and Food Specialist Company" will combine Europe's leading wholesaler, Metro Cash & Carry, and "real,-", Germany’s largest Big Box retailer by sales. If one harkens to the siren song of Metro Group CEO Olaf Koch, international investors will soon be able to participate in an exciting international growth story: "We are now bringing two strong, successful and strategically-focused companies to the start(ing block)." Is this really the case, or is the financial community being sold another round of snake oil?
January 12, 2017
Goodwill: Now you see it, now you don't
Chief Executive Officer Olaf Koch likes to joke about his surname when discussing plans to split German retail giant Metro Group into two separate entities by mid-2017. Koch means 'cook' in German, so the pleasantry is moderately witty in his home country, however fatal it would be in English-speaking business circles. So, all things considered, perhaps 'magician' would be the better word to use. After all, a man who can make nearly €580m in goodwill disappear off a corporate balance sheet in a perfectly legal way is little less than a financial wizard.
January 7, 2017
Lidl's Czech model: "Black as my own face" (Othello)
Over the last seven years, this satirical column has been particularly critical of Lidl and its parent company Schwarz Group. Along with some trade unionists and NGOs, German Retail Blog has often questioned the ethics of this low-profile German discount giant. The company has been termed "ruthless", "hard-nosed" or "redneck" and its management "macho". Doubt has also been cast on an internal decision to burnish corporate morals. Even a recent move by the c-suite towards a less formal management culture has been teased without mercy. But an apology is now called for: Lidl has proved that a leopard can change its spots. How did this conversion of Saul to Paul on the journalist road to Damascus come about? A threat of legal action? A chummy lunch with the publisher? The promise of a job in the press department? No, Lidl has revealed its moral integrity through the eloquence of action.
January 6, 2017
Ready for the challenge?
Flood the moat, raise the drawbridge, lower the portcullis! The robber barons of German retailing are making ready to protect their lands and traditional fiefdoms from the relentless advance of a foreign army carrying the banners of 'Prime Now' and 'Amazon Fresh'. For years German retailers have tried to withstand the strong arm of progress. Customers with credit cards were turned away at the tills; private equity was met with vinculated shares; and CEOs continued to exercise feudal rights over their serfs. But these bastions have slowly crumbled. To date they have at least been successful in keeping online food delivery to a mere 1 per cent of the trade. So will their castles be able to withstand the coming siege? Admittedly, these knights in shining armour are brave and ready to die for the cause of bricks & mortar, but will this help them when the invader has gunpowder?