February 4, 2016

Spanish beer, craft beer and Mahou San Miguel

Jonathan Stordy, MD International, Mahou San Miguel (photo: Mahou San Miguel)
Jonathan Stordy: "We're thirsty for more"
As the title of this blog would seem to imply, this interview has a lot to do with beer. So, if you don't like the amber nectar or have taken the Pledge with The Woman's Christian Temperance Union, but are determined to do a bit of cyberloafing, then you must think niche player and international marketing strategy. Niche player?! Delightfully named Grupo Mahou-San Miguel is a Spanish brewer founded in its present form in 2000 whose roots go back to 1890. Today, the maker of such archetypal Spanish brands as Mahou, San Miguel and Alhambra is the largest maker of beers on the Iberian peninsular and Europe's number five. In 2014 the privately-owned company run by Alberto Rodriguez-Toquero sold 15m hectolitres of beer, water and soft drinks, posted €1.2bn in revenues, and raked in an operating profit of €168m. But such is the consolidation on the global beer market that even this acquisitive middle-weight from sunny Madrid is dwarfed by monster boys Anheuser-Busch InBev (ABI) and potential bride-to-be SABMiller or Heineken. International MD Jonathan Stordy (53) is a Brit who clearly likes to mix his drinks. He jumped wagon to beer in 2013 after a distinguished, 22-year career in spirits as CEO of Russian Standard Vodka and General Manager Europe at Beam Suntory. Stordy is surely the right man in the right place at the right time as international business inevitably grows in strategic importance for Mahou San Miguel on a declining home market.
January 28, 2016

Aldi crosses the Alps, Lidl arms, Penny freezes

Italian ice cream seller (photo: Scusi/Fotolia)
Dolce vita for half the price: Aldi is set to open in Italy this year
Soon Robert De Niro won't be the only one talking Italian. Managers at Aldi, Germany's most profitable discounter, are learning the lingo quick so that they can open up shop south of the Alps this year. And when they do, there is likely to be a battle royal on prices throughout the peninsula for the hearts, minds and pockets of Italy's 60m consumers. Lidl Italia, with a head start of 25 years, will surely sharpen prices in defence of its role as the country's leading discount gladiator. This will only put more pressure on number four player, Rewe subsidiary Penny. Meanwhile, rumours abound as to how Aldi intends to conquer sunny Italy. Country manager Max Hofmarksrichter is believed to be negotiating the purchase of a distribution centre from local Coop Carniche in the north-eastern region of Friuli Venezia Giulia. And sources close to industry federation IBC claim that Aldi has been actively recruiting staff in the Triveneto area since December. True to form, parent company Aldi Süd (Aldi South) refuses to comment. All we know for sure is that expansion into Italy is being actively coordinated via Austrian subsidiary Hofer and that head office is in Verona. Currently, the 4,800m² premises are undergoing refurbishment. The real question, of course, is whether Aldi intends to start from scratch when Lidl has already built a substantial empire with more than 11,000 employees, 570 stores and estimated annual revenues last year of €3.6bn.
January 22, 2016

Walmart, Aldi, Lidl and staff cuts at Asda

Asda store celebration of 50th anniversary (photo: Asda)
50th anniversary: But, as fresh waves of redundancies batter the workforce, will there be any staff left to celebrate the next one?
Only a few days ago, Andy Clarke, CEO of Asda, the UK's third-largest grocer by sales, spoke somewhat ominously of "turbulent times" ahead and another tough year with "massive pressure" on supermarket operators. Staff are now learning what exactly he meant by this. According to the UK media, 200 senior management positions were eliminated on Monday with around 600 more still under review. Estimates vary widely, but as many as 1,000 jobs could be at risk at both HQ and store level in a major reassessment that has the potential to affect up to 5,000 staff. This bloodbath follows a cull of 1,360 jobs in the shops last July. But the power to sack provides only fleeting gratification to those in command. Customers begin to complain about a lack of service, and management talent will drift to competitors. Constant fear of redundancy may make employees pleasingly subservient to dominant execs, but it seldom fosters creativity or entrepreneurial spirit. With a motivational flourish that will surely have old Sam Walton, founder of US parent company Walmart, 'a rolling in his grave, the UK media also report that Asda now plans to scrap all canteen facilities along with vending machines and free cups of tea and coffee. What, one wonders, is next?
January 21, 2016

Asda strengthens European buying group EMD

Chris West, VP of Commercial Transformation, Asda (photo: Asda)
Chris West: Asda's Vice President of Commercial Transformation explains the rationale for EMD membership
In advance of this year's referendum on Brexit, the pro-European lobby in the United Kingdom should have pounced on this one for PR purposes. When the recent floods in the North of England hit Leeds-based grocery multiple Asda Stores Ltd hard, many local suppliers simply couldn't deliver. It was then that Asda's newfound friends at retailer buying alliance European Marketing Distribution (EMD) jumped into the breach and organised alternative sources, representing a triumph of international cooperation. However, the aim of the new partnership to be signed in the first quarter of this year goes far beyond emergency aid and logistics. Asda boss Andy Clarke clearly sees membership of EMD as a vital strategic measure in his fight to reassert the Every Day Low Price retailer's lost price credentials. But will this move by the UK's third-largest grocer be enough to achieve price parity with the "LADs" (Limited Assortment Discounters), including Aldi and Lidl?
January 15, 2016

UK food retailers get the space race blues

Giraffe restaurant at Tesco Watford (photo: Tesco)
Gastronomy in the hypermarket: A great idea, but does it really make a "destination location"?
Dear British grocers, Are you having sleepless nights in this e-commerce and convenience store age? It has reached even our Teutonic ears that you are worried about the vast floor space you have accumulated at considerable expense over the years. For how else are your friends in Germany to interpret your attempts to reutilise store surfaces in your greenfield hypermarkets? To give just a few recent examples: Tesco has introduced beauty salons and gastronomic concepts such as Harris+Hoole or Giraffe; Sainsbury's is flirting with sport clubs; and Asda has opened local community areas on its premises. Can it be that these interesting ideas, however, aren't quite working as well as you had hoped?
January 7, 2016

State of trade as German retail CEOs see it

Edeka CEO Markus Mosa (photo: Natura)
As Edeka CEO Markus Mosa waits on tenterhooks for a government decision in wintry Hamburg...
At the beginning of each year, Lebensmittel Zeitung feels the pulse of the trade by asking the great and the good of German retailing how they view the status quo. Although our newspaper is honoured to receive their replies, one cannot quite suppress a certain feeling of amusement on reading them. Could these politically correct lines, airbrushed with inordinate care by a bevy of overpaid press and legal officers, really come from the same men (where for God's sake are the ladies?) who regularly reveal a wicked sense of humour at the bar of Goldener Zuckerhut, our annual trade shindig in Berlin? But let us not be churlish, there are obviously many good reasons why all concerned have to mind their P's and Q's. Just think of Edeka CEO Markus Mosa. He still lives in the hope that Vice Chancellor Sigmar Gabriel will grant Germany's largest food retailer ministerial approval to buy regional chain Kaiser's Tengelmann against the advice of his own sharp-fanged cartel authorities. Poor man, he must first wait until Gabriel has returned from a sunshine trip to Cuba. If, therefore, readers are looking for delightfully indiscreet confessions and detailed declarations of intent, they must click away now. But for all the inordinate care taken to whiten public teeth and burnish corporate cufflinks, the statements of our retail bosses contain enough substance to reveal what is keeping them awake at night.
December 26, 2015

Retail pundits predict 2016 and beyond

Trade pundits predict 2016 and beyond (photo: Heike_pixelio.de)
In a brave new world where Google is developing driverless electric cars and virtual reality continues to replace video conferences, Amazon CEO Jeff Bezos complains of being asked: "What's going to change in the next ten years?" The US tech billionaire, who is currently trialling drones for home delivery and who wants industry to be off-planeted into outer space so that Mother Earth can lick her wounds, says he would prefer the question: "What's not going to change in the next ten years?" His reasoning for finding the second question more important is as impeccable as it is counter-intuitive: "Because you can build a business strategy around the things that are stable in time." Hopefully, the trade gurus who ponder the future here will also make us think outside the box.
December 17, 2015

Chairman John Allan talks and walks Tesco

John Allan, Tesco Chairman (photo: Mark Mackenzie)
John Allan: "We are working hard to find a way to stunt the growth of the German discounters or to slow it considerably"
John Allan is so polite and pleasant that one can hardly believe he is a retailer. He certainly differs in tone and style from numerous former denizens of the Tesco C-suite, including caustic ex-CEO Phil Clarke and Clarke's dour predecessor Terry Leahy. Presumably Allan's unassuming way is a throwback to his earlier days in logistics, a cut-throat industry, but one where managers even manage to talk appreciatively about their competitors. At any rate, John Allan needs every grocer's ounce of his innate tact and diplomacy in his current role as Chairman. In fact, it was hard to know when he left Dixons for troubled Tesco last year whether to congratulate the man on one of the most prestigious jobs in UK retailing, or to commiserate because it is also the hottest seat in the industry.
November 26, 2015

Oscar Farinetti talks Eataly's start in Munich

Eataly founder Oscar Farinetti (photo: Eataly; Michele D'Ottavio/Pho-to.it)
Oscar Farinetti: "We've come at exactly the right time to Germany"
The opening of Eataly's first German outlet in Munich this Thursday was a logical step for a fine food & gastronomy chain that deliberately appeals to the emotions and plays on its Italianness. After all, the Germans call Munich "Italy's most northern city". The new project in the Bavarian capital is the Turin-based company's 27th outlet worldwide. The concept sells authentic artisanal food in market halls and combines this offer with restaurants, food lecture rooms, and exhibition areas. The 4,600m² site at the Schrannenhalle (old corn exchange) in the heart of Munich is perfectly chosen as it lies adjacent to the historic Viktualienmarkt (farmers' market). But it took Eataly founder Oscar Farinetti two years to overcome German bureaucracy after signing contracts. So the man, who strives for a Renaissance in our eating habits against the utilitarian Zeitgeist of mass consumer markets, now confronts grim local retailers on their home turf with his first shrine to good food. Will they take up the gauntlet? Do they even understand the challenge?
November 12, 2015

Drones & robots set to deliver online customers

Starship self-driving robot (photo: Starship)
Not a toy: This innocent-looking ground drone could replace the delivery van
Women may find the male fetish for technology generally tedious, but perhaps they should give a guy, who sends them flowers by drone, at least a few marks for trying. Florian Sieg, CEO of Germany's largest flower delivery service Blume 2000, intends to make this possible for his fellow men as early as next year. Thanks to a collaboration with Skycart, the California-based drone shipping service, they will soon be able to fly flowers to girlfriends on St. Valentine's Day and to mums on Mother's Day. Blume 2000 wanted to provide a live demonstration for interested companies in Hamburg on Tuesday at its "Drone Delivery Event". Somewhat embarrassingly, the Ministry of Transport refused to authorise the flight due to strong winds. Was this, one wonders, a bad omen or merely the teething problem of an eaglet? For all those afraid of having something dropped on their head Skype founders Ahti Heinla and Janus Friis have invented a self-driving robot that can deliver groceries to the home, while Yamaha has just unveiled a robot motorcyclist that could also be used by retailers. Clearly the local online delivery market is in for a big shakeup.