Populist crusades against retailers
Carrefour: One of several foreign retailers facing the ire of protesters in Spain
They are certainly an easy target for a growing number of populist agitators throughout Europe.
The current financial and economic crisis gripping the peripheral countries of the eurozone has not only hurt consumer pockets.
It has also dramatically increased the number of the unemployed, marginalised, and disaffected.
This leaves the door wide open not only for the sincere social reformer, but also for instigators, self-appointed tribunes of the people, and Pied Pipers of Hamelin.
One political agitator, Juan Manuel Sánchez Gordillo, mayor of the small southern Spanish town of Marinaleda, seems to bear a particular grudge against foreign retailers.
According to the Financial Times, Sánchez Gordillo has embarked upon an anti-austerity march across Andalusia, Spain’s most populated region with the highest level of unemployment (more than 30 per cent).
Some of Sánchez Gordillo's 500-odd supporters, including trade unionists, have been arrested for occupying banks.
It is also claimed that they have stolen food from supermarkets, which Sánchez Gordillo considers hurt local farmers, in order to donate it to food banks for the poor.
As a member of the regional parliament, Sánchez Gordillo enjoys immunity from prosecution for such action, but claims that it would be “an honour” for him to go to jail.
Is this legitimate protest, a revolt against order, or merely misinformed?
A question of maths
Let us work on the premise that the average retailer makes food roughly one quarter more expensive in the chain from plough to plate.
This gross margin, which is regularly undercut by discounters, represents the difference between what the retailer pays for produce from the farmer and the price the consumer is prepared to pay for it at the supermarket.
Depending on how efficiently the retailer works in between, he will make a profit or a loss. Here one must think distribution logistics, property and sites, shop fittings and refrigeration, staff and training, insurance etc.
Such activities and costs are not always seen or taken into consideration by the consumer. Understandably, vulnerable people in regions suffering from swingeing budget cuts and high unemployment are not likely to be interested in such niceties.
Thus, the discontented can become an easy prey to emotional arguments and can be radicalised for political purposes.
The only two German food multiples active in Andalusia, Aldi Nord (Aldi North) and Lidl, confirmed to Lebensmittel Zeitung that none of their stores have been affected to date.
Civil unrest — a European phenomenon?
However, if it is not Andalusia or Greece, then it will be the recent riots in Amiens or in several UK cities last year. And the fact remains that retailers are easier targets than banks.
Unlike the banking industry, where customers expect savings deposits to be physically protected, the whole point of retailing is to make fast-moving consumer goods as easily accessible to as many people as possible.
Put another way: it is more than sensible to barricade gold bars in Fort Knox, but you always want to sell your peaches in the open.
Should European activists continue to encourage attacks on supermarkets, retailer gross margins will not be able to contain spiralling costs for metal shutters, security personnel, CCTV, insurance etc. for ever.
Therefore, if retailers do not wish to exit swathes of troubled Europe in the long term, they must reclaim the moral terrain they have obviously lost within consumer minds.
Surely, there could be more social engagement, as once demanded by the great Swiss retail visionary Gottlieb Duttweiler?
But this is quite a request to make of those who thought they were only in the food business!
Related article in German: By Mike Dawson in Lebensmittel Zeitung, no. 34, 17.08.2012
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