The chiefs of four international giants outline their priorities and plans for growing sales in an ever tougher international climate
Sir Terry Leahy
>>chief executive, Tesco
The industry has been through an uncertain year with a couple of competitors not on top form. That is changing and the fight for customers will be tougher than ever this year. Shoppers will be the winners with lower prices and bigger and better product ranges.
There are specifics such as health where we will continue to give customers greater choice and more information. Our aim is to join up our health offer in-store through initiatives such as nutritional signposts and new ranges such as Wholefoods as well services such as Tesco Diets and our Healthy Living club.
There are opportunities with more people seeking non-food bargains, an exciting opening programme overseas, and the chance to bring services such as home shopping, finance and telecoms to more customers. Convenience remains key for shoppers so we will also open more Extra and Express stores.
We have continued to invest in our businesses around the world, improving our price position in Central Europe and introducing new formats such as Express into Asia. In the first half of last year we grew market share in most of our international markets and opened more than a million square feet of new space.
But they are all challenging markets and we have to fight for customers every day. Our message to suppliers is: thank you for working with us. Without strong suppliers we couldn’t serve our customers as well as we do. Keep innovating and keep talking to us.
Dr Hans-Joachim Körber
>>ceo, Metro Group
International expansion has become a key pillar of the corporate strategy of the Metro Group and the main driver of our dynamic growth.
We doubled our sales from around 128bn in 1996 to more than 156bn in 2004. At the same time our sales outside Germany rose from 5% to over 50% today.
The Metro Group is today one of the world’s biggest international retail companies. We are number three worldwide and number two in Europe. We are present at more than 2,100 locations in 30 countries. Our strategy of internationalisation helps us to compensate for the persistent weakness of the German market.
In 2006, we will continue this strategy. Media Markt and Saturn, the market leader in European consumer electronics retailing, will expand their position in Germany and in the rest of Europe.
Furthermore Media Markt plans to open its first store in Sweden in 2006 and its first store in Russia in 2006/2007. Metro Cash & Carry, our global market leader in self-service wholesale stores, will expand its presence in the growing markets of Asia and Eastern Europe. Several new outlets are planned for Russia, China, India and Ukraine. In addition Metro Cash & Carry is evaluating market entry in Pakistan.
We are convinced of the positive economic development of these countries. China and Russia in particular offer the highest growth rates and the strongest economic momentum worldwide.
Anders Moberg
>>president and ceo, Ahold
There will be two main issues for grocery retailers in 2006: customer focus and meeting customer expectations with regard to value. The industry will need to improve efficiency and cut costs. I expect continuing consolidation and M&A activity.
The environment remains challenging for us, as it does for most retailers. However, we are ideally positioned for a year of profitable growth with strategic initiatives under way in our retail businesses and an aggressive new strategy for US Foodservice.
As far as global hotspots, we see three main areas. The US (where the sale of Albertson’s will be the start of further consolidation); Central Europe (where too many international retailers are present, particularly in Poland, which will not only drive consolidation but also see the entry of more discount operators); and India/China/Russia (all large countries with possibilities). The problem is, all retailers want to be present in the same markets. So regulation is likely.
The more challenging countries will be the new countries in Eastern Europe - Ukraine, Romania and Bulgaria. There are not many international retailers present. And Asian countries such as South Korea and Vietnam are rapidly developing.
Our message to suppliers is: we have a common goal and it makes sense to work more in partnership together. If you improve your productivity we become more competitive and we both drive higher volumes.
Gordon Campbell
>>chief executive, Spar International
Consumers will continue to place a strong focus on convenience and value. Our stores must be convenient to reach, easy to shop, and the store layouts must match the shopper’s missions.
The relative importance of price will continue to vary from country to country but every shop format will need to provide strong reassurance on value. The demand for fresh, healthy products will accelerate. Retailers will need to provide healthy solutions. We will continue to open flagship stores that focus on fresh, healthy food and a wide range of food to go.
The main opportunity is new country expansion. Our expansion in Asia will ensure that we remain a leading player in the global food market.
We opened three Spar hypermarkets in China in 2005 and, with two additional partners in 2006, we plan to accelerate development with a target of 12 Spar hypermarkets. India is not yet a target for the main international retailers as foreign direct investment is restricted. India is attractive for Spar as we work with local partners.
Eastern Europe and in particular Russia will continue to draw international retailers.
Western Europe is challenging for a number of reasons. These include static or declining populations, decrease in food expenditure, an ageing population and a growth in the discount sector. But growth can be achieved through innovative retailing solutions.
Sir Terry Leahy
>>chief executive, Tesco
The industry has been through an uncertain year with a couple of competitors not on top form. That is changing and the fight for customers will be tougher than ever this year. Shoppers will be the winners with lower prices and bigger and better product ranges.
There are specifics such as health where we will continue to give customers greater choice and more information. Our aim is to join up our health offer in-store through initiatives such as nutritional signposts and new ranges such as Wholefoods as well services such as Tesco Diets and our Healthy Living club.
There are opportunities with more people seeking non-food bargains, an exciting opening programme overseas, and the chance to bring services such as home shopping, finance and telecoms to more customers. Convenience remains key for shoppers so we will also open more Extra and Express stores.
We have continued to invest in our businesses around the world, improving our price position in Central Europe and introducing new formats such as Express into Asia. In the first half of last year we grew market share in most of our international markets and opened more than a million square feet of new space.
But they are all challenging markets and we have to fight for customers every day. Our message to suppliers is: thank you for working with us. Without strong suppliers we couldn’t serve our customers as well as we do. Keep innovating and keep talking to us.
Dr Hans-Joachim Körber
>>ceo, Metro Group
International expansion has become a key pillar of the corporate strategy of the Metro Group and the main driver of our dynamic growth.
We doubled our sales from around 128bn in 1996 to more than 156bn in 2004. At the same time our sales outside Germany rose from 5% to over 50% today.
The Metro Group is today one of the world’s biggest international retail companies. We are number three worldwide and number two in Europe. We are present at more than 2,100 locations in 30 countries. Our strategy of internationalisation helps us to compensate for the persistent weakness of the German market.
In 2006, we will continue this strategy. Media Markt and Saturn, the market leader in European consumer electronics retailing, will expand their position in Germany and in the rest of Europe.
Furthermore Media Markt plans to open its first store in Sweden in 2006 and its first store in Russia in 2006/2007. Metro Cash & Carry, our global market leader in self-service wholesale stores, will expand its presence in the growing markets of Asia and Eastern Europe. Several new outlets are planned for Russia, China, India and Ukraine. In addition Metro Cash & Carry is evaluating market entry in Pakistan.
We are convinced of the positive economic development of these countries. China and Russia in particular offer the highest growth rates and the strongest economic momentum worldwide.
Anders Moberg
>>president and ceo, Ahold
There will be two main issues for grocery retailers in 2006: customer focus and meeting customer expectations with regard to value. The industry will need to improve efficiency and cut costs. I expect continuing consolidation and M&A activity.
The environment remains challenging for us, as it does for most retailers. However, we are ideally positioned for a year of profitable growth with strategic initiatives under way in our retail businesses and an aggressive new strategy for US Foodservice.
As far as global hotspots, we see three main areas. The US (where the sale of Albertson’s will be the start of further consolidation); Central Europe (where too many international retailers are present, particularly in Poland, which will not only drive consolidation but also see the entry of more discount operators); and India/China/Russia (all large countries with possibilities). The problem is, all retailers want to be present in the same markets. So regulation is likely.
The more challenging countries will be the new countries in Eastern Europe - Ukraine, Romania and Bulgaria. There are not many international retailers present. And Asian countries such as South Korea and Vietnam are rapidly developing.
Our message to suppliers is: we have a common goal and it makes sense to work more in partnership together. If you improve your productivity we become more competitive and we both drive higher volumes.
Gordon Campbell
>>chief executive, Spar International
Consumers will continue to place a strong focus on convenience and value. Our stores must be convenient to reach, easy to shop, and the store layouts must match the shopper’s missions.
The relative importance of price will continue to vary from country to country but every shop format will need to provide strong reassurance on value. The demand for fresh, healthy products will accelerate. Retailers will need to provide healthy solutions. We will continue to open flagship stores that focus on fresh, healthy food and a wide range of food to go.
The main opportunity is new country expansion. Our expansion in Asia will ensure that we remain a leading player in the global food market.
We opened three Spar hypermarkets in China in 2005 and, with two additional partners in 2006, we plan to accelerate development with a target of 12 Spar hypermarkets. India is not yet a target for the main international retailers as foreign direct investment is restricted. India is attractive for Spar as we work with local partners.
Eastern Europe and in particular Russia will continue to draw international retailers.
Western Europe is challenging for a number of reasons. These include static or declining populations, decrease in food expenditure, an ageing population and a growth in the discount sector. But growth can be achieved through innovative retailing solutions.
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