October 1, 2009

How to get listed with German retailers

Anuga 2009 (photo: LZ-Archiv)
Anuga: The world's largest food trade fair held in Cologne every two years in October (photo: LZ-Archiv)
Should there be anyone on the planet who still doesn't know: In the strictest of confidence, Anuga, the world's largest food trade fair, will be held this October in Cologne. Our newspaper will, of course, have its own stand there. So you want to enter Europe's largest market with a population of over 80 million people? Did you know that these prosperous consumers spend one fifth of their disposable income on food, drink and tobacco €200bn? And are you aware that nearly seven out of every ten euros paid by these customers at the tills is spent with Germany's Top 5 grocers (Edeka, Metro, Rewe, Schwarz Group & Aldi)? Perhaps a suitable time to give some tips & tricks on how foreign food & drink exporters can get listed by German retailers...
September 17, 2009

Talk with Coop Italia CEO Vincenzo Tassinari

Vincenzo Tassinari, CEO Coop Italia (photo: Coop Italia)
Vincenzo Tassinari: "Italian retailing faces a tough selection process where only the strong will survive" (photo: Coop Italia)
Dr. Vincenzo Tassinari (60) hardly seems to have changed since he last talked with our newspaper at Coop Italia head office in Bologna in 1990. "I am a little greyer though." Like most Italians, the CEO beamed when asked after his children, and life's knocks didn't seem to have dented his friendly manner. Admittedly, it is easier to be happy when you can act from a position of strength. Whereas the co-operative movement all but self-destructed in Germany with the demise of the Coop in 1989, the Italian consumer co-operative has nearly seven million members. Despite the tough recession in Italy, Coop Italia, with annual sales last year of €12.6bn, has a leading market share (nearly 18 per cent) of the Italian grocery market. At the end of the day, there are worse things for a retailer than to be deeply rooted in your national soil as well as in the hearts and minds of local shoppers.
September 16, 2009

Aldi's slow start in Poland

Aldi Nord facade (photo: Georg Lukas)
International banner: The Aldi logo is heading east despite post-communist bureaucracy (photo: Georg Lukas)
Aldi North's expansion in neighbouring Poland is lagging far behind initial plans. A good year after entry, the German discount giant has only managed to open around 30 stores. "They are on no one's radar at the moment," says one local retail manager. The main problem seems to be the purchase of sufficiently large sites in the required quality. As rivals power away, can they catch up? According to information available to our newspaper, Aldi has only secured around 120 sites to date. Difficulties with local bureaucracy exacerbate the situation. "They demand an authorization for everything," was one anonymous criticism heard recently in Aldi circles. Authorisations are not only required for the sale of spirits but also cover many other product groups. Despite these problems and the disappointing progress to date, Aldi North sees no reason to withdraw from Poland and firmly believes that it is never too late to enter a market.
August 27, 2009

Extra-strong talk with Fisherman's Friend

Doreen and Tony Lofthouse (photo: Fisherman's Friend)
Doreen and Tony Lofthouse: "We love our business" (photo: Fisherman's Friend)
In a plastic age dominated by large numbers, interchangeable products and a general lack of authenticity, personally rewarding experiences are rare in business journalism. However, you will not be short-changed when you meet owners as genuine as Tony & Doreen Lofthouse, Joint-MD viz. Chairman at Lofthouse of Fleetwood Ltd. If this name doesn't immediately strike a chord with you, think the world-famous and tongue-numbing 'Fisherman's Friend' lozenges. Corporate headquarters are situated on the outskirts of the quaint fishing town of Fleetwood on the Irish sea coast, just north of Blackpool, with a commanding view over Morecombe Bay. Among the peculiarities of this windy seaside resort are a double-decker tram, a lighthouse and seagulls that never seem to sleep – a quirky, but fitting back-drop for one of the food industry's international success stories.
August 20, 2009

Wal-Mart Germany revisited

Walmart Germany (photo: Thomas Fedra)
Costly outing: Walmart's trip to Germany cost shareholders billions (photo: Thomas Fedra)
For years, marketers have been trying to convince journalists that 'retro' is the latest consumer fad. Still a recent cluster of comments on the website of our German online news service, LZnet, did surprise. A number of readers reminisced about the good-old days when US retail behemoth Walmart, or Wal-Mart as it then was, strove to thrive on German soil. In fact, Walmart's incongruous, and ultimately very costly, guest appearance in 'Old Europe' from 1997 to 2006 really does seem to have created a crowd of followers – at least in retrospect. In the interests of free speech, this blog is happy to translate this fan mail below for our international readers. But may one dare to remind the romantics of what the Wal-Mart Germany fiasco was really like?
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 (photo: Martin Hangen)
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" (photo: Ludig Heimrath)
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" (photo: Rewe Group)
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!" (photo: Peter Allgaier )
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 (photo: PlanetRetail)
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.