September 6, 2013

Metro Group's Frans Muller joins Delhaize

photo: Georg Lukas
Smile for the camera: Can Dutchman Frans Muller keep his grin in Brussels?
At first blush it looks a bold and exciting move: Former Metro Group Cash & Carry board member Frans Muller is to become CEO of Belgian food retailer Delhaize as from November 8.

By any account the 52-year-old Dutchman is an impressive manager with an excellent reputation in the trade and a cosmopolitan outlook. Past interviews with our newspaper reveal his detailed knowledge of stores and assortments.

Muller, who left Metro's troubled C&C division in March, has long survived as a foreign executive at Germany's largest retail/wholesale group. Responsibility for up to 30 countries have given him tremendous insight into managing complex international portfolios

Yet his appointment as successor to Pierre-Olivier Beckers has been criticised by some. So perhaps it could all end in tears, but for none of the reasons given.

Gardener wanted

At any rate, Muller will have to do a lot of pruning in his new job. After its withdrawal from Germany, there are few obvious synergies within Delhaize’s international operations (USA, Indonesia, France, Serbia, Greece, Rumania), and a fresh mind will need to look at them dispassionately.

Muller will also have to follow through on the long-awaited turnaround of “Food Lion” in the US, where the group makes nearly two-thirds of its annual global revenues (€22.7bn). Sales at the company’s 1,500-plus US stores have been treading water for years.

In fact, revenues at Delhaize America were slightly less last year ($18.8bn) than in 2008 ($19bn).

Discount barbarians


At home Delhaize, traditionally catering for well-heeled Belgians, has never really delivered a convincing price proposition. Current management has allowed discounter Colruyt (a type of local Kaufland) to come from nowhere to dominant market leadership.

And even French intruder Carrefour has pushed the family-influenced Plc into third position. Meanwhile, the barbarians are at the gate with Lidl and Aldi North.

As these German discounters snap at its heels, Delhaize has struggled to make a go of subsidiary “Red Market” with an unwieldy and slightly bizarre assortment.

To date, Muller’s appointment at Delhaize has been criticised in the media principally on the basis that he is a C&C man coming to a supermarket retailer. His assumption of direct operational responsibility for the US is also regarded as problematic, some pundits preferring to have seen an American manager at the helm.

Welcome to Belgium, Frans


The real stumbling block, however, is likely to be the corporate culture at Delhaize that could be described as proud and aristocratic.

In general, Dutch managers have a pretty poor track record in Belgium. Many of those who have failed at Belgian companies complain about local colleagues who will only converse in French although they can speak Dutch.

And the resolutely middle-class character of the Dutch seems to experience its own particular nemesis when dealing with Belgian aristos.

Perhaps one should have listened to a feeling of foreboding at interview-time when one caught that faint whiff of ancestor worship.

At first, though, it is pleasant to listen to quietly spoken, well-modulated tones more reminiscent of the diplomatic corps than the hard-nosed world of retailing.

Then, however, the anaemic manner and lack of new ideas increasingly begin to grate on one’s nerves, and one finds oneself yearning, guiltily, for the brash and unrefined who at least are entertaining.

Although Delhaize has clearly broken with taboo by appointing Muller as CEO, it doesn’t necessarily bode well that family scion Pierre-Olivier Beckers will become a non-executive member of the Board of Directors at the end of the year. This will be like dating a girl with her father sitting at the next table.

A reluctant bride


Perhaps Muller’s best move would be to ring fellow Dutchman Dick Boer at Ahold and rekindle the long-standing merger rumours.

Although both companies’ store networks are broadly complimentary in the US and Ahold is awash with cash at the moment, most Belgian trade observers do not see a marriage in the offing.

Be this as it may, let us wish Frans Muller well at Delhaize and that he proves the cynical wrong. After all, anyone who can survive so long at the top of Metro is surely worth his salt. Doubtless now, however, he will be learning to ride and practising his French in country houses.

 
Related article in German: By Mike Dawson & Jan Mende in Lebensmittel Zeitung, no. 36, 06.09.2013; cf. also LZNet by Tanja Fries

 

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Comments for this article are closed.

  1. Hans-Joachim Stickel
    Created 6 September, 2013 16:03 | Permanent link

    Thanks for these thorough, well-balanced insights. What a comprehensive list you have compiled to make us aware of the risks that this personnel decision could face! So, yes, you put your finger on the sore spot, but, despite this, you are not dogmatic and do not claim that the new CEO will not succeed.

    Let me comment in my own way: No risk, no fun! Reality teaches us that new staff may not be a guarantee but at least a fair way of getting things moving again when patience with the old leaders has vanished.

    Thanks for your substantial analysis.

  2. Harry
    Created 6 September, 2013 19:03 | Permanent link

    First, Delhaize's headquarter is in Brussels, not Wallonia, 2nd company language is English, what everybody would know having the remotest contact with the company and finally, the article reveals a complete lack of local market knowledge.

    This questions the quality of all other comment as well... Please try to do some research first...

  3. Mike Dawson
    Created 7 September, 2013 17:19 | Permanent link

    Thanks for this input.

    Obviously, the headquarters of Delhaize are in Brussels, where Lebensmittel Zeitung interviewed Mr. Beckers (cf. the link to the interview in the text).

    The regional border of Wallonia runs just south of Brussels, so the original caption has been changed accordingly and "Wallonia" has been placed in inverted commas. Would you, however, call the corporate culture of Delhaize Flemish?

    It is true that Delhaize has a strong US bias, and Pierre-Olivier Beckers even speaks English with a slight American accent. It will therefore be interesting to see in what language the board will converse when Frans Muller arrives.

  4. Jonathan
    Created 25 February, 2014 15:41 | Permanent link

    Get your facts your facts straight

    Hi Mike,

    You have an interesting blog, but you have to do some research before just making statements with no grounds. The company was founded in Wallonia but they have left Charleroi a loooooong time ago. The national chain HQ has been based in Flanders for quiet a while and not close at all to the Walloon border. The International HQ is based in Brussels (We often mock it as the Ghetto Headquarters, since they're in a rough part of the city), nevertheless it isn't relevant how close it is to which part of the country, since Brussels is geographically located in Flanders. Their biggest market in Belgium is Flanders and at the headquarters most people actually speak Dutch amongst each other since most multilingual trained staff (nearly everyone) is Flemish. Most meetings happen in English, but when it comes to business on own soil a mix of Dutch and French is not uncommon at all.

    As to your question in which language the board will communicate, it is ENGLISH!

This is an English-language blog, please write all comments in English!
Thank you.

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