March 7, 2019

Can Russian oligarch save Spanish retailer Dia?

Spanish fire brigade (photo: Frantic00/Shutterstock)
Frantic00/Shutterstock
Emergencia: L1 Retail evidently sees itself as part of Spain's retail fire brigade
Take a Ukrainian-born Russian oligarch and call him Mikhail Fridman. Let this self-made man set up an investment holding in London (LetterOne) with a retail arm in Luxembourg (L1 Retail). Let him invest €700m for a minority stake in Spain's fourth-largest grocer, Dia. Then watch the share price of this soft discount neighbourhood retailer crash by more than 90 per cent on the Madrid stock exchange within a year. How happy would you be, dear reader, if you were he, and what would you do to extricate yourself from this mess? The man Fridman has designated for the job is Stephan DuCharme, managing partner at L1 Retail. But will this courtly Frenchman be able to fulfil his master's wishes? We asked him...
March 1, 2019

A peep at Ocado's proprietary technology

Robot carries parcel (photo: kirill_makarov Fotolia)
The future is already here...in Erith! (photo: kirill_makarov Fotolia)
No, it's not Star Wars. Luke Jensen, CEO of Ocado Solutions, may be master over an army of robots. But, instead of going over to the dark side, these hard-working chaps will commission your online food orders in just a couple of minutes at one of the online retailer's three highly-automated giant warehouses. Our sky-walking reporter Sabrina Schadwinkel jumped on her space buggy for a short hop from Frankfurt to Erith, just a tad south-east of London, to have a look at Ocado's latest and largest so-called Customer Fulfilment Centre. Its two hives are each the size of three football pitches. When fully ramped up, they will have 750,000 storage locations managed by a swarm of more than 3,500 robots. The Erith site, with its chilled, ambient and frozen temperature zones, is expected to achieve annual sales north of £1bn. Nearly a third of this capacity will go to Morrisons, the UK's fourth-largest grocer by revenues. Given that Ocado has also just agreed a joint venture with British retail icon Marks & Spencer, let's challenge Mr Jensen on why international retailers should buy all this classy high-tech...
February 28, 2019

CEO Muller talks Ahold Delhaize

Lovebirds ascend towards the sky (photo: JackQ./Stock.Adobe.com)
JackQ./Stock.Adobe.com
Love birds: The union between Ahold and Delhaize looks both increasingly happy and profitable
Surely this is the stuff Board bonuses are made of? Dutch-Belgian retail giant Ahold Delhaize has just announced a spanking set of results for 2018 and ambitious plans for 2019. In the second full business year since the two companies merged in July 2016, net revenues reached a whopping €62.8bn, while free cash flow grew by nearly a quarter to €2.3bn. The Zaandam-based grocer now runs a vast bricks & mortar empire with 6,770 superstores, supermarkets and convenience stores in the Benelux, Central & Eastern Europe and the US. This reflects the long traditions behind Ahold and Delhaize as retail brands. But the new company is also using its annual capex of €2bn and beyond to pursue an omni-channel strategy via click & collect as well as home delivery services Bol.com and Peapod.com. Net consumer online sales on both sides of the Atlantic have now reached €3.5bn. Given these impressive results, we asked CEO Frans Muller how he intends to top them in 2019...
January 31, 2019

Korean retail giant Homeplus shops in Europe

Homeplus CEO Il-Soon Lim (photo: Bert Bostelmann)
Bert Bostelmann
Brainbox behind the Big Box: Il-Soon Lim
Everyone, even Donald Trump, knows that the focus of human civilization is rapidly returning to its historic cradle in Asia. The ingenuity and diligence of its vast population have brought the region to the fore once more – a process only accelerated by the globalization of the world economy and the advance of the internet. One of the most fascinating cultures in Asia is undoubtedly South Korea, and it is no coincidence that local retailers are the most advanced internationally in e-commerce. A leading figure in the Korean trade is Il-Soon Lim, CEO of Homeplus. The country's second-largest retailer has just given a big shot of Asian expertise to international buying group European Marketing Distribution (EMD)...
January 17, 2019

Seeking an exit to Brexit

Brexit caricature (photo: Alexandra Thompson_Fotolia)
Alexandra Thompson_Fotolia
New fishing rights?
It is strange how a country that gave the world the gentleman's club in all its sedate glory is itself so eminently unclubbable. But the fact remains that the Brexit referendum in June 2016 has polarised a normally phlegmatic UK electorate. Not since the days of the Cavaliers and the Roundheads has the nation been so divided. After Theresa May's failure to obtain parliamentary backing for her Brexit agreement with the EU on Tuesday, a no-deal scenario looks increasingly possible on March 29. This alarms many...
December 21, 2018

Retail pundits predict 2019 and beyond

Alexa (source: Amazon)
Amazon
Alexa, tell me the future!
Another twelve months, another chance, another challenge. Every December, we ask a panel of international retail experts for their take on the future of the trade. As in previous years, our newspaper asked: "What do you see as the most significant or exciting development in retailing/fmcg manufacturing and the most important challenge for the future?" Will these gurus continue to stress the disruption caused to the industry by the increasing digitalisation of our society? Will they despair about Brexit and a world still oppressed by dirty old men? Will they worry about the amount of (micro)-plastic in our oceans and the threat of global warming? Or will their answers just surprise us?
November 29, 2018

Coop Italia exports own label dolce vita

Italian ice cream seller (photo: Scusi/Fotolia)
Scusi/Fotolia
Eat me, I'm Italian
Retailers have been peddling own label for nearly a century now. One relatively new variant is to export it onto the shelves of foreign grocers. Waitrose was one of the first to do so in 1999 with the sale of premium own label to ParknShop in Hong Kong. The UK multiple now exports to more than 50 countries. Swiss giant Migros also markets its 'Café Royal', 'Frey-Schokolade' and 'Orange Garten' brands internationally. What was once seen as an exotic niche is growing in popularity as more and more retailers discover export as an additional revenue stream. The great beauty of this, of course, is not competing with oneself on one's home market. A recent, but formidable player to join this band of merry own label exporters is Coop Italia. The Bologna-based consumer cooperative created a special division for the purpose in 2015, Coop Italian Food. After having obtained listings in around a dozen countries worldwide, Anna Verga, Head of Global Business, is now trying to crack the German market. Will the lady be successful? We also asked own label guru and Private Label Manufacturers Association (PLMA) president Brian Sharoff for his take on the subject...
November 6, 2018

Cdiscount swims doggedly over the Rhine

Idefix and Asterix (source: spatuletail_shutterstock)
spatuletail_shutterstock
Dogmatix, always ready to scout abroad for his master (source: spatuletail_shutterstock)
The rich cultural heritage with which la grande nation has enriched our world must surely also include Asterix. Among the delights of this children's comic is Dogmatix, the little dog who frequently makes himself useful by sniffing out exciting new opportunities and adventures for his master. Perhaps it wouldn't be stretching the simile too far, if we compared these two legendary characters with online retailer Cdiscount and its big French retail parent Casino? At any rate, Cdiscount is hounding through Germany at breath-taking speed. Since putting its first paw on the right bank of the Rhine in July, France's third-largest e-commerce player by sales has organised 14,500 collection points in the packet shops of local logistics company Hermes. Cdiscount wants to open 6,200 more with parcel delivery company DPD by the end of Q1 2019. So given this very loud bark, let's talk to the leader of the pack, Cdiscount CEO Emmanuel Grenier, about his plans in Germany...
October 4, 2018

Siberian discounter plans German entry

Arctic snow scene (photo: Shchipkova Elena/stock.adobe.com)
From Russia with love: German consumers could soon enjoy super-cool prices (photo: Shchipkova Elena/stock.adobe.com)
Talk about audacity! Russian discounter Torgservis plans to enter Germany via Berlin-based subsidiary TS Markt. The retailer from Krasnoyarsk in Siberia wants to rent "more than 100" stores with sales areas of 800m² to 1,200m² and 30 to 40 parking spaces. Expansion is planned in both Northern and Eastern Germany, including Berlin and the federal states of Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt, Thuringia, and Brandenburg. TS Markt is already advertising online for Category and Business Development Managers on its German website ts-markt.de. At first blush this looks very much like carrying coals to Newcastle. After all, Germany is the international home of discounting. You can find discount stores on any local High Street, LZ Retailytics counts nearly 16,100 of them. Working on the basis that "Poor people must save, and rich ones like to", powerful giants such as Aldi and Lidl have carried their no-frills, low-price message with invariable success to nearly 50 countries world-wide over the last 60-odd years. So have the Russians gone suicidal or mad? Or do they know something we don't?
August 16, 2018

Burn, baby, burn – retail & shareholder money

Burning money (photo: noskaphoto/stock.adobe.com)
noskaphoto/stock.adobe.com
From Arthur Brown's song 'Fire': "You fought hard and you saved, but it's all going to burn"
Burn, baby, burn! This radical student protest slogan from the summer of '68 would be a good motto for European retail managers today. However much bonus-fuelled board members may talk about nurturing shareholder value, figures from Bloomerg tell a very different story. In fact trade top brass seem to have been merrily burning investors' money. According to the US financial news company, Economic Value Added was negative for many leading grocers if one looks at their last reported business years. These include such illustrious names as Ahold Delhaize, Carrefour, Metro, J. Sainsbury and Tesco. As any discussion about EVA quickly becomes technical and gives CFOs a wonderful chance to speak Persian to the layman, we asked Insead marketing professor Marcel Corstjens to talk us through this yardstick and what the Bloomberg figures really mean for retailers, managers and shareholders.