Online Discount Retailer Pinduoduo's CEO and co-founder is stepping down and sells a part of his billion dollar stake. Alibaba pursuer Pinduoduo Inc. (Nasdaq: PDD) announced today that Colin Zheng Huang, founder of the high-flying Chinese online shopping company, is stepping down as CEO. He will also reduce his stake in the company by a total of around $ 14.3B. Huang remains chairman of the board of directors of the Chinese e-commerce platform. Huang's successor as Pinduoduo's Chief Executive Officer (CEO) is now Lei Chen, also a founding member and Chief Technology Officer (CTO) in the company since 2016. "I will step back from the day-to-day management of the company and work with the relevant teams and the board on our long-term strategy and corporate structure," Huang said in a statement. Click on image for more:

China’s rebound from COVID-19 has been unique. It came faster and with more demonstrable economic tailwinds for the economy than other markets. But it has also been a bellwether that has helped point to consumer behaviours elsewhere that have inevitably followed China’s lead. An example is the rebalancing of retail playing out around the world. Pandemic-led shifts to further online adoption and an increased focus on (discount) neighbourhood and small-format (discount) retail stores have become an ongoing normal. Though different to other markets, China helps us understand consumer attitudes and responses as they head into 2021 with the prospect of COVID-19 vaccine distributions at scale. Historically, China has demonstrated a mature omnichannel shopping base, with consumers that are already years ahead of the majority of other markets in online shopping. In third-quarter 2020, online sales in China grew by 27% for the year to date, while physical store sales declined by 4%. The declines at physical stores were largely due to COVID-19-related closures, and there has been some recovery in the remainder of the year. China has four main city tiers, based on inputs such as population size, growth levels, location and infrastructure. Key cities (including Shanghai, Beijing and Guangzhou) and A cities (including Chongqing, Tianjin and Dalian) saw the highest closure rates, while B cities and C cities were less impacted. Online has continued on its growth trajectory. “Due to Chinese New Year (late January), population outflow and strict pandemic control policies, upper-tier cities experienced heavier impact during the height of the pandemic, and only 50%-60% of stores were still open for business,” said Tina Ding, Chief Commercial Officer, CPG, Nielsen China. “But due to market resilience and robust foundations, by August, around 80% of stores reopened, signalling both a rebound in physical and some fascinating new developments in the e-commerce space.” In addition to sales growth, online shopping in China saw huge category expansion among shoppers during the onset of COVID-19. While e-commerce growth in China prior to the pandemic was primarily led by personal care categories, consumers began purchasing in categories like dairy, staple foods, beverage and liquor. For example, online growth for dairy has surged from 34% to 55% for the year to date October 2020, versus the same time a year ago and staple foods jumped from 30% to 48% growth for the same period. An adjacent trend that rapidly accelerated in China during COVID-19 was online to offline (O2O) shopping. Offering the best of both worlds, consumers purchase items online and have their items selected, (often by third parties) and delivered within a short delivery time of one-two hours. During the initial days of the epidemic, consumers valued the convenience and safety of these services, and the O2O growth rate jumped up to 20% from January to March. Between March and June, although COVID-19 was under control and consumers could return to normal, O2O growth continued at a rate of 6%. “The rapid adoption of online to offline shopping has driven an element of physical store fragmentation seen in China. Given that O2O transactions are executed in physical stores, O2O purchases—a majority of which are made in small format stores, are captured within physical in-store purchases. These O2O sales are contributing to the growth being seen in small (discount) retail format channels.” said Ding. “O2O was already a fast emerging trend in China prior to COVID-19, but it has definitely accelerated its usage. At the same time in 2019, consumers were more likely to shop in person before, but now their loyalty is driven by the outlets and brands that make themselves available for purchase in an O2O environment. In this world, convenience, proximity and safe access are key things that matter to consumers.” But amid the growth has been upheaval in the physical retail sector. Some stores that were once the biggest contributors to total sales in the industry are now seeing sales declines, while those that may have been previously viewed as “under achievers” are over-performing against previous benchmarks. The concentration, or number of stores, that account for 80% of FMCG sales, often referred to as “golden stores” changed in China between February and September. More than half (56%) of the stores in this universe of golden stores changed from the same period last year. Thirty-three percent of stores are new golden stores and 23% of stores that used to be golden are no longer. The rotation of golden stores in and out is even greater in small-format channels, with Minimarket (58%) and Convenience (42%) seeing higher changeover than Supermarkets (37%) and Hypermarkets (20%). Within the 33% of new golden stores, 71% are brand new entrants (that did not operate before COVID-19). 26% of these brand new entrants have jumped straight into top performing stores. The scale of the changes is unprecedented and will have far-reaching implications for retailers and brands. Similar trends have played out in Paris and London. Retailers and brands that have resisted adapting to COVID-19-shifted spending, perhaps hoping for a return to old habits, now find themselves lagging behind faster-moving competitors that adjusted for the ongoing change. Those that have embraced the change in shopping preferences and pivoted their offerings to suit new consumer needs are already gaining traction. Areas they have addressed include distribution efficiencies, sales force optimization, innovation planning, assortment and pricing. Source: Nielsen Click here for more: China’s Shifting Retail Landscape Signals the Permanence of Change Post-COVID-19 – Nielsen

Discount Retail Chain Aldi Portugal and Spain will test a new home delivery channel in both countries as part of a partnership with the Glovo platform. Through this partnership, customers in some regions of the greater Lisbon, Barcelona and Madrid area will be able to make their purchases easily and conveniently via the application , and receive products from the comfort of their own home Retail chain. “Among the products that are available in Aldi stores, customers at Glovo will find various convenience items, from bakery, grocery, dairy, hygiene and beauty to cleaning categories. The product list will be adapted to the Aldi offer concept in due course,” said a statement from the discounter. According to Wolfgang Graff, CEO of Aldi Portugal Supermercados Lda. "The Glovo model fits perfectly with the 'Discount Aldi' principle, in which we concentrate on simplicity and the essentials, always with the customer in mind." “The intuitive ordering process and fast delivery that Glovo offers correspond to this principle,” assures this person. The above statement states: "With this partnership, Glovo is also expanding its portfolio and consolidating its position in home delivery by offering products from supermarkets and local stores, as well as parapharmaceutical and electronics, beauty products, personal care products and even gifts". “We want Glovo users to find everything they need in the application. In addition to its favorite restaurants, Glovo connects users to various types of services. Thanks to the strategic cooperation with Aldi Portugal, we can further expand the product range through application. Supermarket items are one of the most sought-after categories and have seen remarkable growth over the past year,” added Diego Nouet Delgado, General Manager of Glovo in the Iberian Peninsula. Wolfgang Graff, for his part, is of the opinion that this strategic cooperation corresponds to the interests of his customers: "With this partnership we want to strengthen our commitment to being close to Aldi customers, as their needs always come first for us." “That is why, with the support of Glovo, we are now offering our customers a new channel and a new shopping experience. In this way we can offer people a practical and safe solution so that they can continue to have access to the products they need without having to leave the house,” concludes the CEO of Aldi Portugal. See here for more: https://jornaleconomico.sapo.pt/noticias/aldi-portugal-testa-novo-canal-de-distribuicao-em-parceria-com-a-glovo-722987

Discount Variety Retail Chain Poundland (owned by South African Steinhoff International) has 750 stores in the UK and 60 in Ireland under the sister banner Dealz. Poundland has said it renegotiated 180 leases in the two years to the end of September 2020, saving over 36 percent on average. The discount retailer plans to renegotiate hundreds more as leases come up for renewal by September 2024, saving around €20 million in annual costs. Rent remained Poundland’s largest operating cost in the year to September 30, at £101 million. “We are confident that there remains a significant opportunity to renegotiate more favourable lease terms,” Poundland group chief executive Andy Bond said. Poundland has 750 stores in the UK and 60 in Ireland under the sister banner Dealz. A total of 55 percent of the leases were due for renewal by the end of September 2024, “representing a cost reduction opportunity of €20 million”, Poundland said. Poundland has favoured traditional fixed-rent leases but on more flexible terms. “In all situations we will seek to maximise flexibility within the new lease with a short lease commitment and tenant-only break clause within the initial lease period,” Poundland said. Poundland would also consider relocating at every lease expiry, dependent on whether the evolving offer, such as the rollout of frozen and chilled food ranges – still suited the site. See here for more: https://www.retailgazette.co.uk/blog/2021/03/poundland-saves-36-on-costs-after-renegotiating-180-leases/

What is most surprising after passing through the doors of Maxi Dia, on Avenida de Europa in Alcorcón, (Madrid) is that the store's line of boxes has disappeared. A good part of that space is occupied by pallets of milk and water (the products most demanded by online consumers). The rest of the store is neatly laid out and neat. There are no sideboards with hook products, nor the usual posters advertising offers. The reason is that the store is closed to the public. In it, the only ones who make the purchase are the employees equipped with tablets and scanners in hand who guide them through the store and help them quickly register the products with which to prepare the orders. During the harshest confinement The demand for online food reached 8.4%“Everything is thinking and organized to make it easier for employees to complete orders as quickly as possible and to meet the demand that tripled during confinement,” explains Diego Sebastián de Erice, Dia's Ecommerce director, when he presented this store concept that in the jargon of the sector it is known as “dark stores”, an Anglo-Saxon term that refers to the conversion of stores into warehouses to exclusively satisfy the demand for online orders. Dark stores are a distribution model designed by British and American supermarkets to seek efficiency in home delivery of food. "They are exempt from commercial time restrictions, they have fewer staff, but more trained, which achieves more quality and more efficiency in delivery by better planning shipments," explains the expert in the sector, Bernabé Muñoz Sandoval. Diego Sebastián de Erice, Director of Ecommerce at Dia Emilia Gutiérrez de Frutos In Spain, some distribution chains had tested them without reaching conclusive conclusions about their efficiency, since until last March the demand for 'online' food was very minority. The situation changed with the mandatory confinement when the increase in demand overwhelmed small and large. According to data from the Association of Manufacturers and Distributors, Aecoc, online demand for food went from 3.8% in February 2020 to surpass peaks of 8.4% between March and April to stabilize at 5.7% in May and June. But this is average data, they warn. In the main national distribution chains, the demand could have been much higher around the month of April. Dia, the chain with the most dark storesGiven the need to respond to this extreme situation, the dark store became an emergency measure. “In Día we have been testing in Madrid and Barcelona since 2018 the dark store model on three platforms. This previous experience has allowed us to react in an agile and efficient way to the great increase in demand for the online shopping service that we experienced after the lockdown in March, which tripled. In just over two weeks, we managed to articulate a plan designed for years, ”explains Diego Sebastián de Erice. Día has been the distribution chain that has opted the most for this model with the launch of 14 Dark Stores (3 of them in the province of Barcelona), 12 of which continue to operate with the capacity to satisfy some 400 daily orders. To a lesser extent, other chains such as Bompreu, Eroski, Consum and among others pulled dark stores to respond to the increase in demand. Werable used by El Corte Inglés employees to order online The English CourtEven El Corte Inglés decided to close its Bricor store in Alcalá de Henares, a municipality on the outskirts of Madrid, to transform it into a dark store in just two weeks with the capacity to serve 1,000 daily orders. It was not the only strategy they implemented. All the stores became providers for the online service and department employees paralyzed by the confinement worked to provide food service with multiple versions of delivery beyond home delivery, such as delivery in the store itself or collection by car directly in the car parks. Large and well connectedThe key to a good operation of a dark store, as explained from Dia is “choosing large stores, Maxi DIA, that have other stores nearby where they can refer physical customers, thus giving them an alternative to satisfy their shopping needs. It was essential that, like this establishment in Alcorcón, they be well communicated in order to cover large delivery areas quickly and efficiently ”. Although, as its ecommerce director acknowledges, “we are in a time of change, in which each operator must find their own business model”. Beyond the obligations imposed by the confinement, the bet of the leading distributors in the online food trade is very versatile. To the pure dark stores, Día adds distribution centers around the big cities to cover more population. Technology to reduce costsUntil March, the El Corte Inglés model was what could be called the most efficient and sophisticated version of the dark store. What the sector calls 'micro fulfillment center'. Warehouses closed to the public that require a strong investment in logistics and technology to gain efficiency in the distribution of food at home. With techniques both to facilitate the physical fulfillment of the order, and to manage shipping hours and routes with maximum efficiency. Millionaire investments This is what El Corte Inglés did when launching the Food Distribution Center (Cedial) in 2014, a 10,000 square meter enclosure located on the outskirts of Madrid that was overwhelmed in March. That strong bet is also what Mercadona had played since it opened its “beehive” in Valencia in 2018 with an investment of 12 million euros to mechanize and digitize the delivery of online orders. A year later, the one in Barcelona arrived, with an investment of 7 million euros, and in the midst of the pandemic it opened in Getafe, on the outskirts of Madrid in a project to which it has dedicated 12 million euros. But even so, it was not enough. Once the moment of greatest tension in the attention of physical stores has passed, these have also become providers of online demand. A dark store Reduce the cost of the order by a third“With a micro fulfillment center, the increase in efficiency is very high. The cost of the order can be two-thirds less than one made in an open store. But it also implies a strong investment. Meanwhile, in the dark store the reduction in the cost of placing an order is lower, a third less, but also the investment made is much lower. It all depends on the volume of orders and the density of the area to be covered, ”explains Álvaro García Lombardero, partner at the Kearney consultancy. In his opinion, in large cities such as Madrid or Barcelona, ​​micro fulfillment centers work well "because a few well located around the city can cover large areas". Pure dark stores, on the other hand, are a good option for areas of lower density, such as provincial capitals, where the volume of orders is lower and it is not worth making technological investments for order preparation. Employee at the Mercadona Beehive in Madrid Emilia Gutiérrez de FrutosBut betting on this concept is not easy in any case. It means closing a store to the public requires having another close enough so as not to lose the clientele who regularly visit it in person. “Dia is doing moderately well. It has taken advantage of the fact that it has a large number of stores to give a new utility to the less profitable ones at a time when the demand was elsewhere ”, explains Francisco González, professor at ESIC, an expert in logistics. Risk model The future of this concept is linked to the evolution of large cities, according to the expert in the sector Bernabé Muñoz Sandoval. "At present, before closing a store, it is necessary to carefully analyze whether the risk of losing physical customers compensates for the increase in online stores," he says. But if in the future, city councils make access to the city center even more difficult in their own vehicles and people cannot use their cars to go to the stores to make the heaviest purchases, then, says Bernabé Muñoz, “close physical stores to attend orders online it will be more necessary. " And even more, he points out "the consumer is increasingly more environmentally conscious and it is much more efficient for a dealer to use a single vehicle to carry 50 orders than the alternative of 50 private cars traveling to buy". Ecology in your favorIn any case, what seems certain is that there will be no winning model. “Our philosophy is to grow little by little. The investment has to go hand in hand with demand, which has risen a lot, but which is still far from being the majority channel and less so in a country like Spain, where the physical food trade has a strong capillarity ”, Diego Sebastián de Erice acknowledges. “In the future, it is most likely that there will not be a single model but hybrid models adapted to the demand of each operator. The online purchase of food will continue and will continue to grow, but it will not replace the physical store, ”says Álvaro García Lombardero. See here for more: https://www.lavanguardia.com/economia/20210103/6162742/tienda-dark-store-distribucion-compra-online-alimentacion.html

Discount Retail Chain Netto Poland (owned by the Danish Salling Group) stated that six stores per week will be remodelled from Tesco to Netto. The process of transforming Tesco stores in Poland is to start this month. The owner of the Netto chain announces that it will be a very quick operation. Recently, the Polish Office of Competition and Consumer Protection (UOKIK) issued the final approval for the purchase of Tesco stores by the Salling Group. Thanks to the acquisition, Netto doubles its operations in Poland. Work is already underway to transform the 300 acquired stores. Since the Salling Group agreed with the British supermarket chain Tesco on the purchase of the Polish stores in June 2020, the parties have been waiting for the final approval of the transaction by the Polish authorities. 'I am very glad that the takeover has become a reality. Thanks to the acquisition of Tesco Polska, we double our operations in Poland and become a significant player in one of the largest markets in Europe', said Per Bank, president of Salling Group. Poland is already the largest growth market for the Salling Group, and with the acquisition, the group is strategically implementing its expansion plans in Poland, which form the basis of the company's overall strategy. "We looked forward to the closing of the transaction and we can now begin the planned redevelopment of six stores a week," says Michael Løve, CEO of Netto International. The plan of the Salling Group assumes investing over PLN 1 billion (US$260mio) in transforming Tesco stores into modern Netto discount stores. Tesco Polska is preparing for collective redundancies, which may affect 1,230 people in Poland (this is how many have been reported to the Municipal Office in Krakow). The restructuring will cover administrative structures as well as selected stores. See here for more: https://www.dlahandlu.pl/wiadomosci/,97274.html

Discount Retail Chain Lidl UK (owned by German Schwarz Gruppe) is opening three new London stores in one day as part of a £500m (US$700mio) investment in expansion in the capital. The stores opened in Richmond, Putney and Tooting. The 12,000 sq ft Richmond Road store, plans for which were announced 2020, is housing a school on the floors above it. The new home for Deer Park Primary School has 16 classrooms, outdoor learning space and a multi-use games area. It’s due to welcome over 230 pupils from April. The new 9,000 sq ft store on Upper Tooting Road is replacing one on the same street, which was set to close this week, with all existing staff retained. The third new store, on Putney High Street, has a sales area of just 6,000 sq ft, making it one of the smallest in Lidl’s estate. All three have in-store bakeries and “ample parking for both cars and bicycles”, according to Lidl. Between them the stores are creating about 80 jobs. “It is fantastic that despite the challenging circumstances we have been able to continue our investment in south London and enable even more of the local community access to our high-quality and affordable produce,” said Lidl GB regional head of property Henry Neel. “I would like to welcome the students of Deer Park Primary School to their new home when they make the move this Easter, and to thank everyone who has played a part in delivering this ambitious development. “These exciting new store openings demonstrate we’re embracing the wide range of locations that London has to offer.” Lidl announced a five-year £500m (US$700mio) London expansion plan in 2019. It’s expected to create around 1,400 jobs in total. The latest openings follow one in Hackbridge earlier this month. UK wide Lidl opened 20 new stores in one month this helped it hit its targets despite the COVID pandemic. Lidl must open more than 50 UK stores a year to hit its long-term target of 1,000 by 2023 See here for more: https://www.thegrocer.co.uk/lidl/20-new-stores-in-one-month-help-lidl-hit-target-despite-pandemic/654567.article

Discount variety Retail Chain Action (owned by 3i Group) is taking another step towards a circular economy. The company is taking the step to replace combustion heating systems with low-carbon heat pumps and to recover gaseous refrigerant from the refurbished stores for reuse in newly built stores. Thanks to the L∞P by Daikin program, new Action stores will fully support a circular economy of refrigerants: instead of generating more waste by throwing away the old refrigerant and producing something new, they will reuse what is available. In collaboration with Daikin, Action successfully reused 312.27 kg of allocated refrigerant gas in 15 stores in Europe in 2020. The two companies set up their partnership in early 2019 with one common goal: to reduce environmental impact and support a circular economy. Following their initial success, Action has incorporated this initiative as part of their Action Social Responsibility strategy and is committed to further expanding the partnership with Daikin in 2021, with the aim of collecting refrigerant gas from approximately 40 stores. How does the L∞P by Daikin program work? The L∞P by Daikin program reuses refrigerants from existing systems and upgrades them to new quality. Refrigerants are no longer treated as waste, but are reused in new Daikin systems offered to the network of customers, such as Action. Daikin declares, supported by an external audit, that the amount of refrigerant recovered from Action stores corresponds to the amount of refrigerant used in new certified stores. In this way, Action is assured of both the quality and quantity of the reclaimed refrigerant used in their stores. Working together on a sustainable future Action proves that offering products at low prices does not preclude our being environmentally and socially conscious. Thanks to the partnership with Daikin, new Action stores will support the circular economy approach, reduce environmental impact and avoid the production of new refrigerants. The L∞P by Daikin program fits perfectly with the ambitions of the European Green Deal Circular Economy Action Plan, which aims to reduce waste and material use across Europe. By partnering with Daikin and the L∞P by Daikin program, Action proves that retailers are perfectly capable of becoming more sustainable every day. Michiel Coolen, Action Group Construction Manager: “We are now seeing the impact of our partnership with Daikin. It is an absolute success to collect more than 300 kg of refrigerant gas in more than 70% of our renovated stores by 2020. We are therefore pleased to continue our collaboration and intensify our activities to include more stores in this program in the coming years and to create a closed circle of refrigerant use within the Action network. " Mr. Toshitaka Tsubouchi, Vice President of Daikin Europe: “The main principles of the L∞P by Daikin program are simple, but the contribution to the environment is enormous. Our program eliminates the production of 250,000 kg of new refrigerant per year by giving Europeans access to reclaimed and reclaimed refrigerant. We are pleased that a company like Action has discovered our program and integrated it into their own processes and we hope to inspire many others to make the same positive choice and help us recover the vast amount of available refrigerant in existing plants. " Daikin's L∞P paves the way for a sustainable future Daikin sees the program as part of their path to achieving their own environmental vision 2050. It pledges to reduce its carbon footprint while striving to reduce CO2 emissions to near zero. To achieve this, a circular economy, innovation and smart use are the steps on Daikin's path. The program is a perfect example of a circular economy, harnessing the entire ecosystem of Daikin and its business partners across Europe. L∞P by Daikin also illustrates how the HVAC industry can take action and provide customers with a sustainable choice for their heating and cooling systems. See here for more: https://www.duurzaam-ondernemen.nl/action-maakt-koelmiddelen-circulair-met-l%e2%88%9ep-by-daikin/

Patrick Zahn, CEO of the textile discounter KiK, on ​​the consequences of the lockdown for his company and its customers. Patrick Zahn sits in casual clothes in front of his computer at home in Cologne and conducts the interview via the Internet. The boss of KiK drives two to three days a week to the Westphalian town of Bönen, where the headquarters of the textile discounter is located. Because of the difficult situation, he works significantly more than before, he says from 6 a.m. to midnight, so to speak. Mr. Zahn, you are angry. Why? Because I feel that I and our business have been treated unfairly and disadvantaged. Our branches have been closed for ten weeks due to Corona. This places an excessive burden on stationary retailers, which like KiK do not sell any food. Food stores and drugstores, on the other hand, are allowed to remain open - including supermarket discounters, some of which offer textiles. All of this is massive market intervention at our expense. In addition, until recently there was no support for companies with an annual turnover of more than 750 million euros. Shops may open again soon. The pressure on the government is increasing. Rightly. Because we too are now reaching our limits. In principle, infection with the virus cannot be ruled out, but it can be greatly reduced with sensible hygiene concepts. This means that our employees wear masks and that only a few customers enter the shops at the same time. Incidentally, the food trade registers 40 million visits a day, whereas the non-food industry only receives ten million. That alone shows that we are not a hotspot. Do you think the closure of the store is completely wrong - or just badly implemented? I understood the first lockdown last spring. At that time, almost nothing was known about the virus, and there was great uncertainty. Since then, however, we have learned a lot, including with the hygiene concepts. That is why I now consider it questionable to choose the apparently simplest solution for a second lockdown, which will significantly affect retailers - without even considering other options, such as more consistent protection of the elderly. If everyone goes out shopping again, there will be more contacts and then more deaths. Do you accept that? I'm not doing that right now. For example, we try to understand every case of infection among employees in our company. And we know that the number of illnesses among our employees is below the national average. However, what it can cost us as a society to lead our normal lives again, and which values ​​have to be weighed, we have to clarify in a public debate. The government has launched numerous corona subsidy programs for companies, such as offsetting current losses against previous profits. Can KiK hold out for a few more months? Politicians are window dressing. Up until the third week of February, our company received zero point zero euros from government aid, including no tax refunds. The short-time work allowance is an exception, but not a generous state aid. But these are the previously paid social security contributions of the company and employees. Now companies with a turnover of more than 750 million euros will soon receive public support. In our case, however, that would be a maximum of twelve million - a drop in the ocean. We have been covering our losses with our own funds for ten weeks. At some point our strength will also be exhausted. To person Patrick Zahn, 44, has been CEO of the textile discounter KiK since 2016. He used to work at Plus, Aldi and Hugo Boss, among others. The business administration graduate lives with his family in Cologne. Then your owner, the Tengelmann Group, has to step in? Tengelmann believes in the future of KiK. But that's not an infinite promise. So KiK will survive the corona crisis. Yes hopefully. But it's getting harder. Because we don't earn anything, we have to postpone future investments in the remodeling of the branches and expansion. The modernization is urgently needed in order to remain competitive against online retailers. They now deserve a golden nose and there is nothing we can do. How's your own internet sales going? A significant increase has been recorded, with the online share of KiK sales in Germany only being 2.5%. This is mainly due to the fact that many people buy from us on a very tight budget. They have maybe ten euros in their pockets and are looking for products for 1.99 euros. Such cheap items of clothing are often not available online. Because their shipping causes too high costs compared to the minimal profit. People who have to save do not buy online but in stores. In addition, around six million people have Schufa entries or other problems that prevent them from having a credit card - as a prerequisite for participating in online trading. That means you won't be closing branches in favor of online trading? This is not an option for a manageable period of around five years. The government has just presented the draft supply chain law. It is intended to oblige local companies to protect the human rights of workers in factories around the world. You previously supported this project, do you now think the result is okay? Basically I can live with it. However, I find it worrying that small and medium-sized retailers with fewer than 1000 employees are left out. I also think the extension of the right of non-governmental organizations to bring legal action against companies is questionable, because this is more about instrumentalizing courts than actually finding the right law. And a European solution would be better than just a German law. See here for more: https://www.fr.de/wirtschaft/menschen-die-sparen-muessen-kaufen-nicht-online-90211181.html

Space has opened up in out-of-town retail parks – and shoppers feel more comfortable there. So food retailers are moving in. But will the trend last? It wasn’t just the high street: in recent years, out-of-town retail has been in a sorry state. Retail park stalwarts like Carpetright, New Look and Homebase were forced into company voluntary arrangements (CVAs) to survive, while Toys R Us and Maplin plunged into administration. Even before Covid-19, retail park developments were grinding to a halt, down 15 to 20% year on year, according to a 2019 Cushman & Wakefield report, despite “little evidence of over-supply”. The supermarket megastore was facing a similar crisis. The format had been haemorrhaging market share as more and more consumers opted for the convenience of smaller, closer stores more often. In the UK, hypermarkets held 48% of the market in 2013, but this had dipped to 37% by 2019, according to Bain & Co analysis. “It happened quickly,” explains Bain retail practice leader Anna Thal Larsen. “Major grocers had expanded them rapidly, then almost immediately after ran into problems. There was a resurrection of local shopping, combined with online – compared to the previous well-established habit of one big shop once a week.” “In most countries, activity normalised faster in open-air retail formats” But then came the pandemic and a new lease of life for the far-from-the-high street shopping sites. Open-air, spacious, and easily accessible by car, they have Covid-safe features already built in. And consumers are seeking exactly that from their shopping experiences. “They’ve offered more confidence to customers with regards to safety and comfort,” says Savills director of retail Johnny Rowland. “In most countries, activity normalised faster in open-air retail formats.” But will it last? Does the retail park have lasting appeal in the new normal? What is the future of the huge footprint hypermarket? And what plays are the majors and their discounter rivals making in response? With the UK still in lockdown, year-on-year retail footfall fell by 73.5% in February, with only a 3.4 percentage point improvement since January, according to this month’s BRC-Sensormatic IQ data. But the decline hasn’t been uniform. Retail parks have proven the most resilient format. Where high streets and shopping centres have seen declines in keeping with the average, retail park footfall drops have been closer to 25%. The presence of essential stores like supermarkets is certainly part of that, but safety is a factor too. A recent GlobalData survey found 7.4% of consumers say they would visit retail parks more often after the pandemic, the second-highest proportion only to high streets. “Supermalls and flagship shopping centres had huge appeal among both consumers and retailers prior to Covid-19 with their variety of foodservice and leisure options, alongside large retail stores providing a day out destination,” says Sofie Willmott, GlobalData lead analyst. “But many shoppers will feel that closed, restricted, or open but potentially unsafe amenities do not warrant them visiting these destinations and will choose to shop online or at closer locations such as town centres and retail parks instead.” The perfect size for a supermarket has changed Even with the return of the big weekly shop and the strong growth supermarkets are enjoying, “there’s absolutely no one out in the market looking for big stores over 100,000 sq ft,” says Richard Petyt, partner at Knight Frank. Stores of more than 100,000 sq ft – Tesco’s biggest in Walkden is nearly twice that at 185,500 sq ft – are a symbol of “world domination madness, trying to take on every market possible,” says Rapleys partner Richard Curry. So what’s the optimal store size these days? And where are they looking? Sites now being sought are “properly sized” says Curry: around 45,000 to 50,000 sq ft. These are “predominantly for a food offer,” says Petyt. “That’s what the market looks for now – you go to the shop to buy your food but you buy your non-food online. “They’ve identified that mid-size food stores have got a good future. And with stores trading well it’s spurred them on to find opportunities.” Morrisons has an “ambitious growth agenda” it says, with new store openings within the 20,000 to 30,000 sq ft range. Sainsbury’s paused supermarket launches last year but has returned with 20,000 sq ft footprint stores. Renewal of its 62,000 sq ft Hempstead Valley site “marks the start of a new style superstore”. it said. Tesco is eyeing new locations but in the Express format. Asda’s estate growth has slowed but is a “sleeping giant” says Curry. But it’s not just mid- size supermarkets. At the other end of the scale, small footprint convenience stores remain hot property. And where Aldi and Lidl were previously focused on increasing store sizes, as they’ve ramped up their efforts in convenience, particularly in the capital, the minimum space requirement has dropped to just 7,000 sq ft. Lidl’s ambition is 130 London stores by the end of 2023, while Aldi is seeking 100 stores inside the M25 by 2025. “They have been aggressively seeking stores in London and other major cities,” Petyt says. Amazon – which opened its first UK physical store in Ealing this month – is also expected to roll out further stores in coming months, each around 2,500 sq ft in size. While home-working has devastated footfall in the capital, it’s good news for new entrants readying for the return of normality. Post-lockdowns, footfall is expected to surge. “There’s more opportunities where other retailers have gone bust,” Petyt adds. Discounters The discounters, especially, are “without question” seizing the opportunity, says Richard Curry, partner at property and planning consultancy firm Rapleys. Despite the pandemic, Aldi and Lidl have not faltered in their expansion plans. Aldi opened 37 stores – Covid disruption meaning it missed its 50 target – with a long-term target of 1,200 branches by 2025. Lidl has opened more than 25 stores since July, its 1,000 stores by 2023 target on course. While both are making plays in convenience, they too are targeting retail park locations, site requirement documents reveal. “Many retailers in the retail park world were already struggling, and for some Covid was a death sentence,” explains Curry. “Those Mothercare, Toys R Us, Homebase scenarios were cropping up more and more. “Now park owners are thinking ‘if we’re going to get rent in a pandemic we’re going to get it off a food store’,” he adds. “‘It might not be the value we would have got, but it’s safe.’ The discounters are taking advantage of available space. And they’ve a great selling point of ‘we may be paying you less rent but at least we’re paying the rent’. Plus aspirations of rental value have come to their level, which has enabled them to start expanding more.” “Many retailers in the retail park world were already struggling, and for some Covid was a death sentence” B&M boosted sales and profit forecasts thanks to rising demand for out-of-town and budget shopping, it said last year, revealing plans to open up to 45 stores. Rival Home Bargains has added more than 20 stores in the past financial year – which it cited as a driver of profit growth. Its long-term goal is 800-1,000 stores. “They’ll be getting better rates, and there’s more opportunity. They’re taking space in those voids on retail parks that wouldn’t have been available a few years ago. So landlords are happy to talk to them,” says Richard Petyt, partner at Knight Frank. “They’re a good safe bet for a landlord to have.” Although expansion was well underway among the discounters ahead of the crisis, “they see this as a good time to grow market share, and as a population we still prefer to shop for food in-store,” argues Rowland. “Retail opportunities are now arising on parks which are more affordable than before, and landlords like the drive in footfall,” he adds. While the discounters have been pursuing aggressive growth at the bigger end of their store estates, however, the big four have been more conservative. Morrisons and others are still seeking some new developments, but “it’s a far cry from the food store boom years,” explains Rowland. Their lack of serious action indicates that “broadly, they have enough space”. Indeed, adds Curry, in the face of growing pressure from the discounters, the sales spike the majors have enjoyed through the pandemic has “given them a bit of a lifeline to reassess their estates”. Dunnhumby data shows that both basket spend and items per basket spiked in response to lockdown announcements. As essential stores, the mults have all enjoyed a huge boost in sales through the pandemic, as people do big shops and avoid unnecessary shopping trips. And big stores are the best places to do that. But this shift in consumer behaviour is not expected to last beyond mass vaccination. “Our view is that it’s a temporary shift, not a structural shift back to the old, more traditional way of shopping” “It masks the decline,” says Thal Larsen. “It’s driven by circumstances. Our view is that it’s a temporary shift, not a structural shift back to the old, more traditional way of shopping.” Rapleys’ Curry agrees. “People have gone back to the one-stop shop business rather than queueing up at four different stores, because how many times do you want to queue in the freezing cold?” he says. “But I’m convinced people will go back to doing that again afterwards. Because they like doing it, they want to choose. They’re forced into doing one big shop now, but it’s a temporary thing.” Challenging outlook Without effective action, Bain & Co forecast that grocery sales in European hypermarkets will decline by 13% from 2020 to 2030, while the average earnings before interest and tax margin on this format is set to drop from 1.8% to –0.8%. “We’ve seen this happening even faster in the UK,” says Thal Larsen. “It’s great for the grocers that they’ve had this injection, this lease of life granted to them over the last year. But it’s still a challenging outlook for the sector. It’s now about figuring out how to use this positive year to make the right investments and moves.” So the focus of the major supermarkets is now on making their existing estate work harder for them. “It requires a rethink of store network strategy that will include closing or turning around underperforming stores, pursuing asset swaps, and repurposing space,” Thal Larsen adds. Those being retained by the mults are getting more of the shop floor dedicated to other activities. Some moves have been reactive. Asda has transformed the George clothing section – a brand reportedly under consideration of being spun off by Asda’s new owners – in two stores into separate and secure vaccination centres. Some are testing the waters for what will stick in the new normal. Asda late last year entered a partnership with DIY store B&Q, for new 2,000-3,000 sq ft ‘store within a store’ concessions. It’s doing the same with toy retailer The Entertainer, MusicMagpie and branded fragrance distributor Per-Scent. Morrisons, meanwhile, is rolling out Market Kitchen, a street food concept with hot food to go for shoppers and Deliveroo pick-up. Of course, many are using stores to pick orders made online. Asda – announcing the closure of two e-commerce CFCs last week – claimed store picking would improve levels of slot availability, capacity and service. Sainsbury’s likewise said last week it would expand online operations into more than 20 of its stores in London following the planned closure of its online fulfilment centre in Bromley-by-Bow. Tesco is planning to establish 25 ‘urban fulfilment centres’ by 2022 – built in the back of its large footprint stores. “We’ll need to convert some of those stores, but we have the space… 10,000 to 15,000 sq ft is needed, and they’re very, very efficient in terms of pick,” former CEO Dave Lewis said of the strategy in 2019. They need to do something. “All of the big grocers have been grappling with this for a number of years now,” Thal Larsen says. “Space has been going up while productivity in that space has been going down. “For some consumers, the vastness of hypermarkets can be a turn-off,” she adds. “Resurgent hypermarket operators will convert or re-engage these shoppers through deft differentiation, clearly communicating why it’s worth travelling to shop with them by reviving the customer-centric mission of one-stop shop convenience.” After all, they’re already locked into long leases. Savills analysis finds that the vast majority of retail leases in the UK will remain untouched by the end of the crisis. And without a lease expiry event on the horizon, there is little impetus for landlords to consider re-gears, alternative leases and lower rates. “I don’t think the supermarkets really want to be paying retail rents on dark store activities,” says Curry. “But because they’ve signed up to these leases for 25 years, they’re having to pay anyway. So they might as well turn it into EBITDA-producing space than have it redundant.” As Rowland puts it: “They need to and are thinking smarter about how to make their bricks-and-mortar estate work harder for them, to keep pace with the ever-expanding discounters”. Asda The supermarket last year accelerated its store-within-a-store strategy after seeing an increasing number of shoppers looking to complete multiple shopping missions on a single trip. Larger stores are also being bolstered with partnerships with the likes of online restaurant Twisted London. December saw the launch of a trial of a new concept at Asda’s Clapham Junction superstore that saw the food brand take over one of Asda’s biggest cafés and launch new counter and delivery services. Tesco Tesco revealed its tie-up with automated micro fulfilment tech vendor Takeoff Technologies in 2019. Its plan is to install the technology at scores of larger stores, making use of spare space to fulfil online orders. With online’s share of grocery sales at a record 15.4% in the four weeks to 21 February (up from 8.7% last year) [Kantar], utilising the store estate to increase capacity is a savvy move. Interact Analysis forecasts there will be more than 220 automated MFCs in the UK by 2024, the bulk in grocery superstores. Morrisons Morrisons first trialled its Market Kitchen concept in late 2019, and has since rolled it out to several stores, as well as in standalone format. The stores become “part-supermarket part-fresh food takeaway”. While hot food to go is not new at the mults, using the sites as hubs for courier platforms is more recent. Market Kitchens offer rapid delivery via Deliveroo, meaning stores double as a well-placed dark kitchen. Morrisons last year also nearly doubled the number of in-store florist shops to more than 100. Sainsbury’s The supermarket acquired Argos in 2016, and soon started establishing dedicated desks in its superstores. Sainsbury’s supermarkets are fast becoming the only place to collect Argos ordered goods. In November it confirmed plans to close 420 Argos stores over the next three years, explaining that in their place 150 Argos outlets would open in its supermarkets. It’s a big draw. Argos gained two million new customers over the pandemic, with sales growth of 10%-plus. Aldi Aldi has quickly ramped up the number of its stores that offer Deliveroo deliveries over the past 12 months – now available from more than 40 stores. As part of the process, items are picked and packed by store staff. It’s a far cry from the major online picking operations that take place in big four supermarkets. But it’s a start. Aldi’s huge expansion of its store estate over the past couple of years would give it significant reach if it did decide to launch home deliveries from stores. See here for more: https://www.thegrocer.co.uk/property-and-planning/how-retail-parks-have-become-prime-grocery-retail-locations/654130.article

Discount Retail Chain stores are great at times of economic downturn, when people are looking for savings. We can see it in the increase in the value of the shopping basket of Action's customers, as well as in the increased interest of the owners and managers of retail facilities in discount tenants, says Sławomir Nitek, CEO of Action Polska, in an interview with dlahandlu.pl. The upward trend on the Polish discount market has been going on for over a decade. Before the outbreak of the pandemic, forecasts for its development were about 7-9% per year until 2022, and now it is 8% by 2024, he adds. What is the company's situation one year after the outbreak of the pandemic? Is the company's turnover currently lower than a year ago? The period of the pandemic has been, and continues to be, difficult for the commercial industry. I will not hide that the epidemic situation and related restrictions also affected our company. The results for 2020 are not record-breaking, but still satisfactory for us. I would like to emphasize that last year we entered the provinces in which the Action brand was absent so far West Pomeranian, Kuyavian-Pomeranian and Świętokrzyskie, as well as Warsaw. We also celebrated the opening of the 100th store in Poland. We have significantly expanded our network in the central part of the country and strengthened it in the south. We have opened a total of 44 stores on the Polish market and expanded the team by over 500 employees. This is a great success considering the difficult economic conditions. What are the company's plans to open new brick-and-mortar stores? How many such stores can be launched this year? We intend to maintain at least the same pace of development as last year. Of course, everything will depend on the further development of the epidemic situation and introduced restrictions. At the moment, I can say that we are planning further expansion towards the north of Poland, increasing our presence in large agglomerations, entering new markets and strengthening our presence in the southern and central part of the country. Already in the first quarter of this year, we opened the first store in Krakow and others in Katowice and Poznań. We also introduced the Action brand to such important regional cities as Konin or Bielsko-Biała, and with the opening in Nowy Targ, we entered Podhale. Soon we will start operations in Gdańsk, it will be our first location in the Pomeranian Voivodeship. We will keep you updated on new stores. What locations will be taken into account when opening new stores? Will they still be shopping centers and retail parks? When looking for locations for Action stores, we take into account various formats, both shopping centers and retail parks, as well as free-standing facilities, on large streets and in housing estates. We make decisions based on the economic potential of a given place and its accessibility to consumers. See here for more: https://www.dlahandlu.pl/nonfood/action-dyskonty-swietnie-sprawdzaja-sie-w-kryzysie-widzimy-to-po-koszyku-zakupowym,97133.html

Discount Retail Chain Aldi Belgium (privately owned) opened in 2019 its new distribution center in Turnhout. It has just officially received a BREEAM "Outstanding" certification. The score achieved makes it the fourth most sustainable industrial building worldwide, says the discounter. Bee hotel At the time, the discounter invested fifty million euros in the building, which was created with no fewer than ninety sustainability parameters in mind. For example, there are more than 4000 solar panels on the roof and the cooling is done with CO2. The local fauna and flora was protected around the building and there was even a bee hotel. The supermarket now also receives official recognition for these efforts, in the form of a BREEAM Outstanding certificate. The certificate has already been awarded during the design phase, but it has now also been officially confirmed. According to the BREEAM International New Construction 2016 standard, Aldi Turnhout is even in fourth place worldwide with a score of 92.3%. "We aimed for the highest possible score, and are therefore very proud of the end result," says Frank Vissers, general manager of the site. "This achievement is fully in line with our sustainability policy and proves once again the sustainable choices we make, both for the well-being of our own employees and for the environment." See here for more: https://www.retaildetail.be/nl/news/food/aldi-distributiecentrum-turnhout-vierde-duurzaamste-industriegebouw-ter-wereld