February 26, 2016
Marcel Corstjens: Gives the readers of Lebensmittel Zeitung and German Retail Blog exclusive insight into his latest trade bestseller
Not another marketing book! This understandable reaction will soon have you eating your hat because 'Penetration.' is going to be a best-seller in the trade and international business circles. You won't have read ten pages before you place an order for your friends on Amazon tout de suite. The author is none less than trade guru Marcel Corstjens, Emeritus Unilever Chaired Professor of Marketing at French business school INSEAD. The former non-executive board director of Jerónimo Martins and member of the advisory board of TrueStart is now also an entrepreneur and consultant. Although the title may arouse expectations of a more erotic nature, the subtitle, The New Battle for Mind Space and Shelf Space, evokes the smash hit Storewars Corstjens co-authored with his wife Judy in the 1990s. In this context, penetration simply means what the Germans would call Käuferreichweite, i.e., the number of consumers who buy your product and the number of households shopping in a store at least once within a defined period of time. In his latest literary provocation Corstjens examines a number of 'standard truths' in marketing that are still taken as gospel by most retailers & brand owners. The illustrious professor then proceeds to demolish them with caustic wit and palpable glee.
February 9, 2016
Sir Stelios Haji-Ioannou: A popular hero tries his hand at retailing
So the man who once claimed that food retailing was "easy-peasy" has done it at last. For a long time it looked as if the eloquent 48-year-old resident of Monaco had been daunted by the rigours and perplexities of council planning permissions and supplier contracts. But Sir Stelios Haji-Ioannou has now opened a first low-budget easyFoodstore in gritty London suburb Park Royal, thus making good on his promise to undercut German discounters Aldi and Lidl in the UK. Like a latter-day Freddie Laker, the charismatic Greek-Cypriot billionaire is on a self-appointed mission to give the British people cheaper prices. The story of a guy, whose favourite TV programme is said to be Only Fools and Horses, is well known. After creating the low-cost airline easyJet in 1995 and successfully taking it public five years later, Sir Stelios went on to found easyHotel, easyPizza, easyBus, easyGym etc. under the umbrella of his private investment vehicle easyGroup. A serial entrepreneur will best appreciate the Derek 'Del Boy' Trotter philosophy of "some you win and some you lose". So is easyFoodstore just a good PR stunt, or is Sir Stelios serious? And, if he is, does he have a bat's chance in hell?
February 4, 2016
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
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
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
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
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
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
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
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.