Elsevier Food International

Volume 8, No. 4 November 2005

Market Vision
Since Michel Pattou took the helm of the French independent retailers’ group Intermarché (the Musketeers) in September 2002, he has zealously reorganised the group’s financials and operations. He needed to take drastic action without compromising the Musketeers’ fundamentals of solidarity and independence. Top priority was getting rid of the German operation without letting the German musketeers down. Pattou succeeded in this task, which he nevertheless characterised as a “grim, complicated, sad and very costly” operation.

Michel Pattou(ITM):The main musketeer's dilemma

EFI Special
When in March 2005 a group of Irish private investors bought a couple of shops in the P.C. Hooftstraat, the most prestigious shopping street in Amsterdam, local investors shook their heads in disbelief. There was nothing wrong with the shops or the tenants. It was the net initial yield of 4.7 per cent.

A safe haven in uncertain times

ECR
While retail lags behind industries such as car manufacturing, banking and financial services, when it comes to the extent of business which has been moved to outsourcing, its growth is a reflection on the shift from manufacturer-based economies to service-based economies. Traditionally the preserve of product manufacturing such as private label, there has increasingly been a move to the outsourcing of services including IT and logistics.

Outsourcing: tool of the future for retailers

R&D
Consumer confidence in Europe was blown several times in the last two years. Food scandals again hit the headlines despite a new battery of stringent control measures. Fraudulent practices, lack of screening, inattentiveness and rigidity undermine the system. An intelligent controlling system that identifies and tackles potential hazards at an early stage could prove a way out. Transparency is a key word.

Food safety systems: prevent rather than cure

Many suppliers consider innovation as the only opportunity to balance the growing power of retailers and satisfy the needs of their consumers. Innovative products with new flavours, packages and combinations can be crowd pleasers, but they also add to the complexity of a manufacturer's operations. This needs to be managed properly, before complexity costs ruin the business.

Manage complexity before it ruins the business

Country Profile
With its population of some 70 million, and a growing economy, Turkey is an interesting market for local and foreign retailers. Retail is modernising rapidly but high prices, tariffs, slotting fees and inequality in income levels, are slowing down this process. Consolidation and reform might further stimulate Turkey’s retail sector.

Turkey: Torn between tradition and modernisation

Food Watch
Airport supermarkets are starting to take off, providing airports with significant revenues and
profits, and retailers with a captive audience.

Flying high

Food Buying
With global procurement no longer the domain of just multinational retailers but also increasingly that of local retailers, the pace of global procurement has reached record levels and volume is expected to grow over the next several years. The result is a seismic shift in the global economy. But few companies seem yet able to manage global sourcing effectively. The main challenge for global sourcing is that consumer preferences vary by market.

Shopping the global mall

Real Estate
Due to the Internet frenzy cooling off and the economic downturn since 2001, investors are looking for safe havens. With European countries increasingly dismantling state-funded pension systems and interest rates at record low levels, property has become a popular long-term investment. Retail real estate is in demand and hungry investors are keen to put up with increased risks.

Retail real estate: a safe haven in uncertain times

Instore
Retailers are becoming increasingly aware of the material costs of sorting and authenticating cash payments. European makers of cash-handling systems expect cash payments to stay. Although future trends favour sophisticated POS hardware, cashless payments are also making inroads, particularly in the US where shoppers prefer convenience above all.

Payment by cash or touch

Fresh Foods
Grapes are becoming more popular and in recent years changes have occurred in all aspects of the grape value chain, from production quality and increased availability from sourcing countries to innovation in packaging and development of new varieties.

Who's eating seedless grapes?

Retail Profile
Norma. The smallest of German hard discounters cannot survive without a strict lowest cost business model. However, it takes more to stay in business in Germany’s extremely competitive discount sector. Pragmatism, adaptability, shrewdness, prudence are the qualities that clearly distinguish Norma from the discount pack.

Survival of the fittest