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?
December 27, 2016
In ancient times when the priestess Pythia presided over the Oracle of Apollo at Delphi, interpreting the future was big business. Little has changed since then; we just call our soothsayers consultants. Then, as now, we urgently need to demythologise the often sibylline answers today's highly-paid experts give to the overhyped mystery of things to come. The best way to predict the future is, of course, to make it yourself. The next best thing is to interpret what the movers and shakers are doing as the minnows will usually follow the Tritons. In retrospect, the future may have looked unfathomable to most contemporaries, but often turns out to be little more than a continuation of existing trends that should have been glaringly obvious to all concerned at the time. So perhaps we should look at what is in order to know what will be. But do the trade gurus we have asked to ponder the future agree?
December 22, 2016
Santa goes cyber
In case you hadn't noticed, it's nearly Christmas and surely a time to be a little less formal. One of the pleasures of being a journalist is the broad variety of people you get to meet. These range from bolshie trade unionists, blowing whistles and ranting about the evils of private equity, to sleek, narcissistic CEOs. Fortunately, there are positive exceptions in both categories. One also has one's colleagues, who, as with most publications, include a remarkable number of eccentrics. Then there are some infectiously enthusiastic stringers, like Werner Prill and Christian Lattmann, who have just returned from whistle-stop store tours in New York City viz. Europe. Both were astonished that we wanted to put their photos online as neither of them claims to be a professional photographer, but in our opinion the odd shaky or underdeveloped picture makes for authenticity. Want to have a peek?
December 20, 2016
Ever young, beautiful and with a smartphone: Frame from the promotional video of Amazon go
At first blush it looks like progress. Next month Amazon will go public with a pilot convenience shop that has no checkout lines or cashiers. The beta model for the new "Amazon go" store is currently being tested by company employees in hometown Seattle. A corporate video explains the concept: Sensors and articifial intelligence detect what shoppers take from the shelves and add each item to a virtual cart. The price of the goods is then debited from their smartphone when they leave the store. If the "Just Walk Out" technology is implemented by Amazon for bricks & mortar retailers or is copied by them, checkout-free stores will obviously have a positive impact on their P&L. Like most employers, retailers, whatever their highly paid CEOs may say to the contrary in public, generally see their staff as a cost rather than as an asset. So they are likely to embrace the new idea with open arms. But it is surely also a tacit admission of failure.