April 6, 2020

Retailers world-wide outface the coronavirus

Fearless Girl statue in New York (photo: imago images / Pacific Press Agency)
Fearless Girl acts responsibly and wears a protective mask, but doesn't let the loss of personal freedom break her spirit
It's not Home Office, it's Living at Work. Finding it harder than ever with a grumpy spouse, hyperactive children and the faulty technical systems lovingly provided by your employer's IT department?

Ping, ping, ping! Doubtless you are also enjoying the telephone calls, emails and WhatsApp messages from your control-freak boss every few minutes and 24/7.

Rather than add to the current hysterical overkill in communication, this blog promises not to burden your electronic in-tray with any further 'urgent' newsletters about the current pandemic.

Instead, readers may find here any statements we have been able to elicit from global retailers, including Aldi China, Colruyt in Belgium, Esselunga in Italy, Homeplus in Korea, and Mercadona in Spain, as to how they are coping with the scourge of Covid-19...

Their responses are in chronological order, where the latest entry will always appear immediately after this introduction. So you won't need to plough through items you've already read.

Our German newspaper, Lebensmittel Zeitung, also offers a free weekly information dossier on the coronavirus. Simply download after completing the one-off registration process: Das Corona-Dossier

Meanwhile, stay safe wherever you are locked down in the global village, wash your hands regularly, and keep those damned masks on.


"Stores at Aldi China stayed open during the outbreak"


Aldi Shanghai, store front (photo: Andrew Meredith)
Third anniversary in China: An Aldi neighbourhood store front in Shanghai
Do you still go with the flow? How near to normal is customer frequency in your Chinese stores after the recent partial relaxation of lockdown restrictions?

Aldi aims to be a neighbourhood grocery store, and our pilot stores remained open during the outbreak for customers to purchase their daily necessities. While we saw an increase in online orders during the height of the outbreak here, we are seeing more customers in our pilot stores as more people leave their homes for work and play with the situation improving in China.

Will the current crisis have any negative effect on your expansion plans in China?

Since entering China three years ago, Aldi now has seven pilot stores, all located in Shanghai. We have always been committed to a long-term presence here, and we want to ensure that we are pacing our development appropriately.

We feel even stronger about this promise during this extraordinary period. We have stood by local customers from the day we began and will continue to do so now and in the future.

We have spent years researching the market and planning our expansion, and we will continue to follow that plan to grow steadily over the years.

During the crisis many retailers have restricted both the number of customers entering their shops at any one time and the length of time they can stay there. How have you managed customer flows?

Throughout the outbreak, Aldi China did not impose a time restriction on shopping at our pilot stores. We wanted to give our customers a comfortable and stress-free environment for them to make purchases. At the same time, we take the health and safety of our customers and staff very seriously, which was why we implemented temperature screening procedures at the entrance of our pilot stores.

Aldi China is also committed to supporting our customers’ dynamic lifestyles, and we do that by offering a thoughtfully curated range of products across all categories. All products are 'Handpicked for You' by Aldi experts to meet local needs, so customers can make their selection quickly and easily before going about their daily lives.

How have you coped with the online boom in customer orders?

Like many online retailers, we have seen an increase in online orders during the outbreak.

To support our customers and keep our online platforms running smoothly, our suppliers and teams have been working extra hard to keep our shelves stocked so our customers can continue to shop for daily necessities both at our pilot stores or through our e-commerce platforms.

We did not impose purchase limits on products as our customers know that our supply is steady.

Our online business has been progressing smoothly. Customers can purchase our products through our WeChat mini-program and our Tmall channels, as well as through our partners Ele.me and JD Daojia. 

Have you hired extra part-time staff and incentivised front-line staff with bonuses?

At the moment, we have more than 250 people on our team. During the current extraordinary period, our main focus has been on offering customers what they need, while ensuring the health and safety of consumers and staff throughout the outbreak. We will continue to provide a safe and fulfilling work environment for our employees.



"People are buying bigger quantities of everything at Colruyt"


Colruyt store (photo: Christian Lattmann)
A Colruyt store in Belgium
We all live in increasingly reglemented times. What restrictions have local authorities imposed upon you as Belgium's largest discounter?

There are various measures we need to comply with as per Belgian Law, including the Ministerial Decision of March 23. These include limiting maximum shopping time per customer to 30 minutes and allowing only one person per family to get the marketing done.

Initially promotions and discounts were banned. But this had to be rectified two weeks later when prices started to rise.

Have you noticed any initial panic buying among your customers?

There were two moments on March 12 and 17, after the government had announced new measures related to the lockdown, when our stores were practically plundered.

There was a big run on long-life products such as canned food, flour, rice, pasta and toilet paper. It took several days to recover from that, also in terms of logistics. 

Today, there is no panic buying any more in our stores, thanks also to government measures. But we have noticed that people buy bigger quantities of everything when they visit our stores.

Their average shopping basket is larger because people are staying at home and cooking. Baking products, such as flour, are particularly popular.

How well is your supply chain functioning? Have you any delivery problems

For the moment, everything is going quite as planned. Apart from some Italian wines and special products, things are fairly normal.

Some fruits (citrus products) risk getting a little more difficult (partly due to the rain in Spain), but no large issues have been noted for the moment.

What retail formats seem to be most popular with your consumers?

We have noticed that smaller, neighborhood formats, such as our own Spar Colruyt Group and OKay stores, are very successful.

This is logical because they are situated close to people's homes and the government has asked everyone to shop at the store closest to their own home.

On the other hand, we have also found that our larger Colruyt stores are also recording higher sales than usual.

How are you coping with staffing problems?

By hiring people on a temporary basis, including students.

We also have a large pool of admin personnel who are helping in the stores.

Furthermore, we are in contact with companies whose employees are technically unemployed in order to see what we can do together.


"Demand has changed over time at Homeplus"


Homeplus CEO Il-Soon Lim (photo: Homeplus)
CEO Il-Soon Lim rallies her store troops and inspects stock levels in the non-food department of a Homeplus store
Panic on the Titanic, yes, but how about at South Korea's second-largest retailer by sales? 

There was a very short period of panic buying in the last week of February, but this has since normalized.

German food & drugstores sales have rocketed during the pandemic, but local consumers aren't in lockdown and non-essential retailers have only been closed for two weeks. Covid-19 peaked in South Korea as early as in mid-February, so what have you learned from the crisis so far? 

Homeplus has noted a sharp increase in online demand and at our Homeplus Express supermarkets. Our company has been able to handle this regardless of the Covid-19 issue.

Demand has also changed over time. At first there was a sudden need for staple food items and health-related products. Then there was a call for fresh ingredients and home meal replacements when customers stopped eating out.

This was followed by a demand for home teaching and indoor entertainment products and, more recently, weekend outdoor activity items.

Are you experiencing staffing problems due to illness and/or fear of infection?

No. At an early stage in the outbreak, our CEO Il-Soon Lim established a Risk & Safety Management Task Force in order to create a dedicated response system and to prepare a contingency business plan. She implements this via a daily online conference at 4 p.m. with Leadership Team members.

Homeplus has introduced flex-time, remote and home office work. Our company has also staggered staff lunch and rest breaks in order to minimize the risk of infection and the spread of the virus.

How well is your supply chain functioning? Are you experiencing any delivery problems? 

Homeplus has had some shortages when it comes to imported goods, but fortunately our company obtains most of its assortment from domestic sources. Our market size also obviously gives us some protection.

What stationary retail formats are most popular with Korean consumers?  

For urgent needs, which cannot be met quickly enough even on online, customers seem to prefer shopping at supermarkets and convenience stores near their home.


"Our sector is a priority one"

 

Mercadona store (photo: Jörg Rode)
A Mercadona store in Spain
Eviva España takes on a whole new meaning in these tragic days. How has Mercadona, Spain's largest retailer by sales, tried to manage the current crisis?

We continue to comply with the emergency measures decreed by the government. Our company also has its own medical service with over 100 professionals and works in close cooperation with the national healthcare authorities.

Our sector is a priority one, and it is our duty to serve our customers daily. Our 90,000 employees and 1,400 suppliers are therefore working hard to guarantee the supply of products necessary for people to do their basic shopping.

Customers are buying more than usual, which is why one might see empty shelves at certain times of the day, but we replenish them every morning. All our stores and facilities are open and fully operational. 


"We at Esselunga are ramping up our delivery services"


Esselunga store (photo: Christian Lattmann)
Esselunga is Italy's leading hypermarket operator by sales
Is big still beautiful in the time of the coronavirus? How is Italy's most profitable hypermarket operator coping with the current crisis?

Despite the current exceptional growth in demand, Esselunga hasn't any kind of supply issue and our stores offer their full assortment.

We protect our customers and staff by providing masks, disposable gloves and hand sanitizers. We've also installed protective checkout screens, alternated checkout closures, and used floor stickers to ensure social distancing while queuing at service counters.

We regularly take the temperature of our employees and customers before they enter the store. We've also increased our cleaning and sanitizing services in all of our manufacturing, logistics and store activities.

In order to thank them for their outstanding service to customers, we've decided to reward our employees with a special bonus worth 150€. For example, we've issued them with prepaid shopping cards, covered their children's tuition fees, and financed company canteen services.

We've limited the number of shoppers allowed into our stores at any one time, and we recently reduced opening hours. We've also established priority service lanes for medical staff and all volunteers who are helping the authorities to service families in need.

Our e-commerce platform is experiencing a huge increase in online orders. We're working hard every day to ramp up our delivery services in order to service this exceptional demand.



N.B. The above answers have been abbreviated and their order partially changed for the convenience of our readers.

Statements collated by Mike Dawson, International Desk, Lebensmittel Zeitung


German Retail Blog

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3 Comments (Write a comment)

  1. Tim
    Created 6 April, 2020 22:47 | Permanent link

    Comms at a time of crisis

    Firstly I would not hesitate to publish as normal. To see a familiar name in the inbox is welcome and speaks of continuity.

    Good to hear Homeplus positive approach to flexible working, home working etc. Covid-19 will make for grown-up conversations on how we all work together in the future.

    Supply chains are indeed stretched to breaking point with reefer containers in short supply and in the wrong places, meaning prices are rising. That said, East Asian businesses are being innovative and utilising European ingredients for HMR products for convenience stores.

    The food & beverage sector will maintain connections across borders -- paramount at this time of crisis. #staysafe

  2. Boris
    Created 7 April, 2020 08:50 | Permanent link

    Preparing for the next phase

    Updates like these on how retailers (and brands) respond to the Covid-19 outbreak, and which actions they are taking specifically, are a valuable source of inspiration at this time, when many retailers are still trying to figure it out -- especially in markets that are behind Asia and Europe in the coronavirus curve.

    Please keep collecting statements, and do send them out via e-mail.

    Over the next few weeks, the focus will gradually shift from immediate crisis response to strategic adaptation to a difficult twelve to 24-month scenario, and it would be great to get insight from you as to how retailers are moving along here.

  3. Hans Stickel
    Created 7 April, 2020 15:30 | Permanent link

    Retailers worldwide outface Coronavirus

    Thank you, Mike Dawson, for your insightful article. It's good to read how countries close to China, where the coronavirus started out, are dealing with market recovery.

    I'm not surprised that Homeplus has been doing a great job. In a developed country like South Korea one would expect a retailer whose shops have not been closed down to be doing alright. I consider this just one of the many challenges that any big retailer has to accept and resolve.

    That said, the staff who see to it that store shelves continue to be full of products every day and the cashiers at the tills deserve great respect and admiration for exposing themselves to the risk of infection.

    I would like to challenge you with the following questions:

    - What have food retailers around the globe developed "out of the box"?

    - What can retailers learn from the "early birds" beyond the standard preventive measures seen in north-western Europe? I live in Brazil where the numbers of infected people and deaths are only at the beginning of the curve, so any such advice is critical...

    - I imagine that your parent newspaper, Lebensmittel Zeitung, having news access to all relevant markets around the globe, could provide an impressive checklist of challenges, opportunities and risks for those retailers on markets where the worst is still to come. What do you think?

    Supernosso, Mart Plus, Pão de Açúcar and a lot of other big Brazilian food retailers would certainly be most interested to learn from colleagues in other countries who experienced the virus at an earlier date...
    Grande Abraço from Brazil

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