Nettorama (privately owned by Bastmeijer family) has had a great year in 2022. Both turnover and profit rose sharply, Quote reports. Nettorama posted a turnover of €2022 million in 410. This is reported by rijkenblad on the basis of annual reports filed with the Chamber of Commerce. Of that €410 million, about a quarter remained as gross profit. After deduction of personnel expenses of €28 million, other sales costs and taxes, the bottom line was a net result of exactly €24,298,271 for the Bastmeijer family. Quote states that Nettorama is remarkably healthy financially. 'Pinstripes that want to sell bank loans have little chance with Bastmeijer', according to the business magazine. Nettorama achives €58 million more turnover than a year earlier. That turnover of €410 million for 2022 is considerably higher than the €352 million achieved by Nettorama in 2021. Profit also rose sharply, by almost €3 million. 'And that with only 32 supermarkets', Quote notes with some surprise. Almost €760,000 is made in profit per location, a calculation shows. The total profit was paid in its entirety as dividend to (Jaap) Bastmeijer, according to Quote. Bastmeijer has been on the Quote 500 rich list for years. The magazine estimated his net worth at around €600 million in November this year. , Distrifood reported at the time. That capital would now have grown by just over €24 million. The highest ranked supermarket owners in the list are Colette, Frits and Monique van Eerd. Together, they would account for around €2.7 billion. Quote states that it has high expectations for the coming years and that it follows Nettorama with suspicion. 51 stores converted from the Boni formula to Nettorama. As a result, the total grows to 83 supermarkets. 'Will Bastmeijer's Nettorama break the €12 million profit barrier in 60 months?', the business magazine wonders. According to Quote, the success of the A-brand discounter is partly due to the disappearance of promotional formulas such as Edah and C1000. A gap where the low-price formula dived. As a result of the merger with Boni. #smartdiscount #nettorama #boni #netherlands #discount #discountfoodretail #discounter #foodretail #retail #drc #consultancy #discountretailconsulting #retailconsulting #consulting

Discount Retail Chain ALDI Australia (German family owned) is coming in hot with an early Christmas present for thirsty Sydneysiders, a new pop-up pub serving craft beers without the expensive price tags. Born out of a first of its kind collab down under, ALDI Australia with their mates at BrewDog are coming together to open Special Brews by ALDI, the most affordable night out in Sydney this Christmas. About the Special Brews by ALDI experience Opening its doors at the iconic Hotel Sweeney’s for one night only on Wednesday 13 December, Special Brews by ALDI has all the character you’d expect from an urban pub set against the backdrop of the summery Sydney skyline. From custom merch to chippies to snack on, cold Froth Whitlams flying out the wazoo, and what’s sure to be a top shelf crowd, Special Brews by ALDI will have it all. And the best bit? ALDI’s “Good Different” prices, with a can of the brand new and exclusive ALD IPA priced at just AU$3.25. Aussies frothing for an exclusive first taste of the new ALD IPA at the Special Brews by ALDI pop-up will have to be quick though, as there are no bookings, meaning it is first come, first served on the night! Thirsty patrons can collect their punch card at the door and purchase up to three cans of ALD IPA, with ALDI and BrewDog slinging limited edition stubby holders and socks to commemorate this special occasion, and hold future, ALDI Tin Diesels. Paul Handley, ALDI beer expert and buying director said, “Special Brews by ALDI and our new, exclusive ALD IPA with BrewDog is a first for ALDI Australia, expanding our award-winning range of beers and showing Aussies that they can enjoy a craft experience without the hefty prices. We are so excited to welcome patrons to this new experience and for Aussies to crack open the new ALD IPA.” “Rest assured, if you have left your Christmas celebration plans to the last minute, Special Brews by ALDI is here to save the day, maybe even the entire silly season. Aussies know ALDI for delivering the best value on everyday groceries, but we’re taking it a step further by delivering a night out in Sydney for under a tenner this holiday season. We want to help Aussies come together and celebrate big, so don’t be a Scrooge, shout your mates or colleagues a round of ALD IPA this Christmas and still have enough left in the wallet for the taxi home after.” Read more: ALDI to open pop-up pub Special Brews - Food & Beverage Industry News (foodmag.com.au)

Discount Retail Chain Aldi UK, German family owned, is on course for a record-breaking Christmas, as it predicts more UK households will opt to shop with the discounter amid the cost-of-living crisis. The grocery retailer claims that an increasing number of consumers are choosing to shop with Aldi this year, which will culminate in more than half of British households buying at least one Aldi product. Aldi UK managing director of buying Julie Ashfield said: “Although we’re all feeling the pinch a little more this year, that doesn’t appear to be dampening the appetites of our customers, who are shopping earlier and treating themselves a little more in the run-up to the big day. “Whether it’s the indulgence of our Extremely Chocolatey biscuits, the festive taste of Ballycastle Mince Pies, or Luxury Crackers with our premium Cheese Truckle Tower, shoppers this year are tucking into some early treats. Products thought to do well this festive period include alcohol, with the retailer expecting to sell more than five million bottles of sparkling wine, including champagne and prosecco, and Christmas dinner essentials, such as pigs in blankets. Aldi expects to sell 43 million pigs in blankets and more than 1,400 tonnes of sprouts in the weeks leading up to Christmas and New Year, along with more than a million packs of smoked salmon and two million jars of cranberry sauce. A bumper Christmas follows yet another year of expansion for Aldi, which opened its 1,000th store in the UK this September. It intends to launch a further 500 stores across the country. Last month, the discount grocer invested a further £12m in cutting the prices of more than 180  products, as its Christmas Price Lock initiative froze the prices of a range of festive essential against last year’s price. “As many of us try to celebrate on a little less this year, the price gap between Aldi and the traditional, full-price supermarkets is as big as ever,” added Ashfield. “Our unbreakable promise to customers is simple: whether it’s for a weekly shop or for all you need for an amazing Christmas, Aldi will always offer the lowest prices. “That’s why we’ve seen people switch and stick to Aldi in their droves this year, being impressed by our prices then amazed by our quality.” Read more: Aldi predicts biggest Christmas on record (grocerygazette.co.uk)

Discount Retail Chain Lidl UK, owned by the German Schwarz Group, is replacing “Use By” dates with “Best Before” on all its own brand milk and yogurt. The move forms part of the discounter’s plans to tackle food waste, as it encourages shoppers to use their judgment on whether products are still good to eat. Lidl GB has announced changes to labeling on its yogurt and fresh milk ranges, helping customers reduce food waste at home. Customers will discover the change on milk this month, while yogurt will be implemented in early 2024. Richard Inglis, head of buying at Lidl GB, says: “At Lidl, we know that a lot of perfectly good milk and yogurt is being thrown away because of ‘Use By’ dates. It therefore makes sense to us to make the switch to ‘Best Before’ so that shoppers can use their own judgment on whether their milk or yogurt is good to consume.” Tackling home food waste Lidl GB has become the latest retailer to scrap “Use By” dates across its key dairy lines, helping prevent edible food from being thrown away. Lidl GB is asking consumers to check for themselves whether a product is still good to consume.Earlier this year, Sainsbury’s announced it is also replacing “Use By” dates with “Best Before” dates across its own-brand milk range to reduce food waste. The new labeling will roll out in the new year, and the change will be complete by the end of February 2024. Lidl’s updated milk packaging has already started filtering into stores across England and Wales, and customers can expect to see the change on yogurts starting early 2024. Milk and yogurt that has been stored correctly and doesn’t smell bad or appear lumpy is safe to enjoy. Lidl is therefore encouraging consumers to use their judgment and be guided by “Best Before” dates to help determine whether a product is fit for consumption. “We’ve got a long record of making positive changes to reduce food waste, and this latest step builds on our commitment to helping households tackle food waste at home,” says Inglis. The move announced today bolsters existing action taken by the discounter to tackle food waste, which also includes initiatives to tackle waste in stores such as Lidl’s Too Good to Waste boxes, which help reduce food waste by 17,000 metric tons annually by selling 5 kg of surplus fruit and vegetables for £1.50 (US$1.90). Read more: Lidl GB scraps “Use By” dates on own brand dairy to slash consumer food waste (packaginginsights.com)

Discount Variety Retail Chain Dealz, part of the listed Pepco Group, opened its 300th store in Poland in Bytom. This implements the store network development plans planned for this year. Customers will find over 3,000 products of international brands on the shelves of the new stores. The 300th Dealz store, with an area of 500 sqm, was opened in the Old Stadium Centre at 11c Narutowicza Street in Bytom, Poland. The store's diverse assortment includes more than 3000 products at attractive prices, including groceries, drugstores, home décor and furnishings, toys, as well as accessories and pet products. The offer is complemented by a portfolio of Christmas products from the seasonal offer, among which you can find, such as Christmas decorations, gift proposals, as well as a large selection of Christmas sweets from around the world. Since February 2018, when the first store in Swarzędz was launched, through the hundredth store in Olsztyn, to the 200th facility opened in March this year in Kłodzko, Dealz has been continuously increasing its presence in Poland, operating in over 300 cities. The new store in Bytom is also the third point of the chain in this city, which means strengthening Dealz's position in the region."We are very proud of the opening of the 300th Dealz store in Poland. We want to be closer to customers, both in large cities and in small towns, to facilitate their access to branded products at low prices," comments Marcin Langowski, CEO at Dealz Poland.The chain strives to be a trendsetter of foreign brands on the Polish market. Dealz's sales department is constantly combing through different countries to be able to offer customers products that they have encountered during their stay in Spain or Italy, for example. Currently, the chain employs nearly 2,000 employees in stores and headquarters in Poland. Read more: Dealz przekroczył pewną granicę (dlahandlu.pl)

Discount Variety Retail Chain Dollar General (listed NYSE: DG) CEO Todd Vasos is looking to refocus the company’s efforts amid a challenged retail landscape. The value retail leader recently spoke to investors following the company’s earnings release, stating it would be looking at business “through the eyes of the customer” in order to “get back to basics” across its store, supply chain, and merchandising operations. “We have spent the last several weeks taking a fresh look at all areas of our business, as well as the challenges and opportunities in front of us,” said Vasos, emphasizing that the initiative is not about rebuilding a team or organization “but about refocusing efforts already underway.” Stores As part of previously announced plans, the company is investing about $150 million in store labor hours this year, though the allocation of those funds will be shifting. In order to drive increased returns, Dollar General is removing some funding from its smart teams, transferring it to its store team efforts to focus on customer service and store-level inventory management activities. Specifically, self-checkout will see some changes. Self-checkout, previously an area that retailers heavily invested in, is seeing a lot of pull back over concerns of growing shrink rates. A study of retailers found that retailers with self checkout had 4% higher rates of product loss. Dollar General will be putting a lower emphasis on the technology, shifting more labor to front-end activities to have an increased “visible presence” of associates at the front of stores. “While self-checkout has contributed to the convenient proposition for our customers in certain stores, it does not reduce the importance of a friendly, helpful employee who is there to greet customers and assist while the checkout process is happening,” said Vasos. A second area of focus will be inventory management, supporting store team associates to improve on-shelf availability. “To do this, we are reallocating some of our labor investments toward store level inventory management processes including an even greater focus on getting product onto our shelves more quickly,” he said. “We are also reducing the span of control for our district managers, which will provide more opportunity for engagement with our store managers and their teams, and more consistency and execution across the store base.” Vasos expects this to also have benefits related to staff retention at the store manager level where turnover is high, ultimately trickling down to improved customer experiences. Additional Store Plans for 2024 Heavier emphasis on rural stores (80% of new stores planned within these communities) 90% of new stores and relocations will be in larger store formats 30 new pop shelf locations 15 new Mi Super Dollar General stores in Mexico 70% of remodels will be in larger store formats Supply Chain Across the company’s supply chain, Vasos said the company will be focusing on SKU rationalization and on-time-and-in-full (OTIF) truck deliveries. Regarding inventory, optimization efforts will include a closer look at Dollar General’s product offerings and introducing productivity improvements to distribution centers. Currently, the company has between 11,000 and 12,000 total SKUs in stores today, depending on format. Changes include optimizing product layout across facilities, improving communications for performance standards and expectations, and standardizing system configurations. “Now that we're past the capacity constraints we experienced last year, we are reducing the number of temporary outside warehouse facilities being used to store products as inventory flows more effectively to and through our existing distribution centers,” he added. “By better leveraging these existing distribution centers and taking advantage of the new permanent facilities we have opened over the last year, and those we will open next year, we believe we can significantly reduce the amount of temporary warehouse space needed.” Q4 may see the phasing out of some of these temporary facilities in order to lower distribution and transportation costs, and improve the customer experience and drive increased sales. Merchandising Keeping value for consumers at the core, Dollar General said it is in good shape regarding everyday pricing, but it will be looking to highlight private brands and other savings opportunities, maximizing promotional activity. “Beyond these opportunities for our customers, we have also challenged our merchants to consider how they can drive simplification for our stores and supply chain as well with meaningful SKU rationalization as one of the most immediate areas of focus,” he said. “To that end, we have identified several opportunities to eliminate certain SKUs that have become less productive first, by moving them out of our DCs and then ultimately to our stores to sell through,” Vasos added. The efforts, he said, should help further reduce inventory and shrink, simplifying operations across both stores and distribution centers, and introducing more long-term efficiencies. Read more: Dollar General to ‘Get Back to Basics’ As it Refocuses Store, Supply Chain, and Merchandising Strategies (risnews.com)

Discount Retail Chain Tiendas Neto, a Grupo Salinas company, announced a strategic expansion agreement to new markets, including the United States, with OEL, SàRL through Consumer & Leasing Investments, based in Luxembourg. So far, the amount of the settlement has not been disclosed; However, a statement said the partnership is a "significant achievement" for both parties. The agreement will help Tiendas Neto expand its presence and service offering, with increased investments. The agreement reflects the confidence of foreign investors in the growth potential of Mexican companies and their support for the country's entrepreneurs, and reinforces Tiendas Neto's financial position, allowing it to carry out its expansion vision in a solid and efficient manner The transaction, whose terms and conditions are subject to the approval of the authorities, represents a boost in Tiendas Neto's ability to contribute to the economic and social development of the markets it targets. Both companies expressed their enthusiasm for the collaboration and assured that they are committed to working together to achieve a successful expansion for the benefit of the collaboration. Learn about the presence of Tiendas Neto in Mexico Tiendas Neto began operations in 2009, under the command and direction of its founder and president Hugo Salinas Sada, son of businessman Ricardo Salinas Pliego. The company, part of the Grupo Salinas conglomerate, has an influx of 6 million customers a week, through its more than 1,600 points of sale in 21 states of the country. Tiendas Neto records an average of 15 million transactions per month, the conglomerate said. In addition, it mentions that in the 13 years it has operated, it has generated more than 10,000 jobs in the country. One of the biggest moves in the short history of Tiendas Neto was the purchase of the Super Precio chain of stores in 2012 from Grupo Gigante. With this transaction, the company added 427 branches to its network. Read more: Tiendas Neto Reaches Expansion Agreement (elceo.com)

Discount Retail Chain Lidl Denmark, owned by the German Schwarz Group, has combined its management office with a Lidl store to bring the Lidl team even closer together. The new headquarters in Aarhus, Denmark, has been officially open since November 6, 2023 and the new Lidl store on the first floor of the headquarters is now the flagship store in Denmark. This is where new products and interior design concepts are tested for the whole country. On the evening before the opening, local residents were invited to celebrate with employees and live music. By doing this, we are continuously striving to strengthen the relationship between our administrative offices and our stores as well as with our customers. The central location of the new headquarters provides an ideal workspace for over 350 employees in Denmark that allows for even better communication with one another. A restaurant, gym, and roof terrace with a view over the city are perfect for getting together and networking even after work. In the warmer months, there are even morning yoga classes on the roof terrace. Read more: https://www.linkedin.com/posts/lidl-international_insidelidl-with-lidl-denmark-activity-7133389525224955904-JZse?utm_source=share&utm_medium=member_android

Discount Retail Chain Monetka, owner by Russian Lenta, announced the opening of the first stores under its brand in Moscow and St. Petersburg. Lenta opened two new stores under the Monetka brand in Moscow at 3 Semyon Gordogo Street and 10 Prosveshcheniya Street, Bldg. 1. In St. Petersburg, three retail outlets appeared at the following addresses: Bogatyrsky Prospekt, 2a, building 1, Zarechnaya Street, 41, building 1, and 15, bldg. 1, building 1. For the convenience of customers, each store has two self-service checkouts, the opening hours in Moscow are from 8:00 to 23:00, in St. Petersburg from 8:00 to 22:00. The sales area of the new stores is from 295 to 305 square meters. The assortment includes up to 3,600 products, it is selected to meet the short shopping missions and daily needs of the residents of nearby houses. Monetka's commercial team, together with Lenta's team, adapted the assortment of stores to the needs of residents of Moscow and St. Petersburg, adding products from local brands. The opening of Monetka stores in Moscow and St. Petersburg is one of the steps taken by Lenta to implement its strategy for the development of the convenience store format until 2025. In October, the company announced the acquisition of this retail chain of convenience stores. Lenta's plans for further organic growth in the convenience store format mainly through the opening of stores under the Monetka brand, while the existing Mini Lenta stores will also be rebranded and will continue to operate under the Monetka brand. The Monetka team has already renovated Mini Lenta stores and opened them under the Monetka brand in the Urals and Siberia: in Barnaul, Yekaterinburg, Kemerovo, Novosibirsk and Perm. The company plans to gradually unify its decision-making processes related to strategy, investments, accounting, finance, treasury, internal audit and legal issues. Cross-synergies can also be achieved in IT, logistics, and other operational processes. Lenta reduced prices for Kamchatka pink salmon thanks to direct contracts with producers in the Far East Read more: https://www.retail.ru/news/lenta-otkryla-magaziny-monetka-v-moskve-i-sankt-peterburge/

Discount Retail Chain Netto Denmark (owned by the Danish Salling Group) is located snugly in the bend at a roundabout in Skallebølle west of Odense. And to such an extent that already a year after its opening, the brand new store had to adapt to the previous holiday legislation, now simply the closing law after the end of Great Prayer Day and stay closed on public holidays in 2023 due to the size of the turnover. Skallebølle is a small town on western Funen with approx. 700 inhabitants. Usually, Netto would not invest millions of dollars to build a new store in this location. But the map showed that it was a blind spot with far to the nearest store and other Netto stores. At the same time, Skallebølle is located only about 15 kilometers west of Odense, 5 kilometers east of Vissenbjerg and quite close to exit 53 on the West Funen motorway, says Regional Manager Sebastian Vinther, Netto. However, when Dagligvarehandlen.dk put him and store manager Jon Steen Olsen together in the store, gravel has temporarily been added to the sales machine, as burying district heating pipes causes traffic to clump together at the roundabout. `We have felt this in terms of turnover since the excavation work began after the summer holidays. According to the plan, it should be finished by the end of November, which we look forward to with the upcoming Christmas shopping in mind`, says Jon Steen Olsen. Reopens on public holidays The regional manager even has an early Christmas present for the store manager, as the store has been granted dispensation to be open again on public holidays. But the trap will fall again if the store has a turnover of more than DKK 82.8 million. According to section 6 of the Danish Closure Act, the Danish Business Authority has the opportunity to allow grocery stores in rural areas to stay open on public holidays if there are no other grocery stores within a distance of approx. 4 km from the store applying for exemption. However, according to the Danish Business Authority's interpretation of the Closing Act, an exemption cannot be granted if the store's turnover is more than twice as high as the turnover limit in section 5 of the Closing Act, which is currently DKK 41.4 million. Although the small community is located on the border with Odense Municipality, the town belongs to Assens Municipality with the town hall all the way out towards the Little Belt. Rema 1000 on the horizon The store got off to a good start, as it has the catchment area here in Skallebølle, but also just as much the commuter route between Odense Middelfart, says the store manager, who can feel that the pressure is greatest when people have to shop on their way home from work. Before Netto could open in Skallebølle, the townspeople had to drive to the neighboring towns of Vissenbjerg or Tommerup to handle the shopping. Prior to the opening, the discount chain had an expectation of how the new store would perform. And even though the store was judged to be doing well, the number crunchers in the chain had still missed the mark in relation to the employees the store needed. Apart from the period of excavation work, the flow of customers has remained at a stable high level. Local Facebook group The local support for the Netto store resulted in a local Facebook group "Ja tak til Netto i Skallebølle" with 700 followers. The interest grew during a long run-in that began more than 10 years ago, when the developer Amstrup & Baggesen unveiled plans to build a grocery store at the roundabout in Skallebølle. Skallebølle Residents' Association was happy with the new store, which came after they had lost the local school and felt beaten back in terms of settlement. But with Netto, optimism has returned. Battle between supermarket Brugsen and discounter Netto They were less happy in Dagli'Brugsen in Vissenbjerg, which had to close on 30 November last year. According to Søndersø Brugsforening, which owned the store, it had been running with a monthly deficit of a six-figure amount all year. High energy prices, an upcoming major investment in a new refrigeration and freezing system costing more than three million DKK and the new discount competitor in Skallebølle dealt the store the final death blow. Merchant Morten Andersen (pictured above), Spar in Vissenbjerg, drew the longest straw in the battle with Dagli'Brugsen for the local customers. He could feel that customers were lured to the new Netto store in Skallebølle. But after a while, he found that "things have actually fallen back to the old level". SuperBrugsen in Tommerup Stationsby also felt the customers' interest in the newly opened Netto in the beginning. But here, too, the assessment is that the market has regained its balance. Strong Netto profile The 41-year-old Jon Steen Olsen has, among other things, experience several Netto stores in Odense and has noticed a clear difference when meeting customers in Skallebølle. `Here we are local and know each other. It is really very important that we meet customers with kindness and attention`, says Jon Steen Olsen, who on an operational level will be in charge of weekdays with basket customers and weekends with customer carts. `There is a very large fluctuation in sales over the week. But regardless of customer pressure, it is always our goal to give customers a good shopping experience`, says Jon Steen Olsen. He was originally educated in Dagrofa Foodservice and later came to Bilka, before at the age of 24 began his career in Netto and back in 2009 was given responsibility for Netto in Bogense, which he had helped build up the year before. One of his first tasks at that time was to create order and a nicer store, which has since been the benchmark for the stores he has been responsible for. `We only succeed through clear communication and good planning`, says Jon Steen Olsen, who has four children aged 12 to 22 and still has to pick up children from school. With good planning and skilled employees, this is not a problem for the store manager. The regional manager praises his store manager for being present, he has a good overview and ensures a healthy operation by constantly being at the forefront, so that the store always appears tidy and well-filled. `And not least, Jon is good at meeting his employees in a good and respectful way, which means that the whole team is strong and ready to cover each other off during peak loads`, says Sebastian Vinther. More Netto on the way around Odense The regional manager of the Funen, South Jutland and Southwest Jutland Netto stores is looking forward to the chain strengthening its position around Odense with a brand new Netto in Bellinge west of Odense and the relocation of a Netto in Næsby north of Odense. "Bellinge is undergoing rapid development with new housing, as it is an attractive suburb of Odense. In addition to the locals, with the new store we will also be able to attract commuter traffic between Odense and Assens," says Sebastian Vinther. So far, SuperBrugsen and 365discount have only been on the market in Bellinge. According to the regional manager, the new location in Næsby also provides traffic advantages, as it will be easier to get drivers commuting between Odense and Bogense to swing into the parking lot. `It is interesting to see an old and significant highway being revived. Before the motorway came in 1967, there were inns, grocery stores and service stations along the A1 highway, which was a main thoroughfare through Denmark,` says Mayor Søren Steen Andersen of Assens Municipality. He is pleased that the main road, which runs parallel to the E20, which it crosses in several places across West Funen, has once again come into its own: `Skallebølleslagteren and Netto in the same village live well from this traffic. Likewise in Grønnemose, where one company and service facility after another is popping up these years. The old Funen Summerland has reopened right between Fjelsted Forest Hotel & Conference and Vissenbjerg Storkro. Read more: Net gives it a shell in city with 700 inhabitants | The grocery trade (dagligvarehandlen.dk)

Discount Retail Chain Lidl`s mother company the German Schwarz Group (Schwarz Produktion Stiftung & Co. KG) has been expanding its food production capacities for articles from the compulsory range for years. It started with MEG (1,500 employees/MA) and non-alcoholic beverages. In the following years, Solent (350 employees) with chocolate and snacks, Bon Back (700 employees) with frozen baked goods, Bon Gelati (500 employees) with ice cream, Bon Presso with coffee and Bon Pasta with pasta were added. The turnover in production is estimated by German Lebensmittel Zeitung (LZ) at 2.5 billion euros. With Lidl's sales of 114.8 billion euros worldwide in 2022 and an estimated 75% COGS (Cost of Good Sold = cost of goods), production accounts for only about 3% of the cost of goods and shows the further potential of a verticalization strategy. A comparison with Migros production in Switzerland is worthwhile. Sales in the production of private labels in 2022 amounted to CHF 5.8 billion. This means that verticalisation is at the forefront of Migros worldwide. The mandatory assortment in the food retail sector is characterized by high turnover speeds and rather below-average trading margins and represents 55-60% of total sales. This verticalization strategy has absolute cost advantages through economies of scale, in-house learning curve, and faster ways to respond to trends with product innovation. In addition, there is an increasing desire to become independent of suppliers in the production of private labels. The prerequisite for economic success is maximum utilization of the capital-intensive production facilities with high fixed costs. When it comes to verticalization, the Schwarz Group focuses on both an independent development of production (e.g. coffee roasting company Bon Presso) and acquisition (e.g. Erfurt pasta with 170 employees). In the case of the construction of new production capacities, the aim is to achieve the minimum optimal operating size (MOG) with the lowest unit costs in order to achieve cost leadership. In the case of coffee roasting, a large scale entry can be assumed. The newly built capacity of Bon Presso is expected to be 50,000 t, with coffee sales in Germany of 345,000 t in 2020. As a result, market conditions are changing dramatically. Overcapacities will arise and weaker suppliers will be forced out of the market in the medium term. For example, Aldi Nord closed its rather small coffee roastery (60 employees) in Herten in June 2022. Aldi Süd will follow at the end of 2023 with its roastery in Mühlheim (MA 70 employees). Production will be bundled in New Coffee GmbH (160 employees) at the Ketsch site from 2024, where production has been carried out for Aldi since 1973. Consequently, Aldi is also trying to implement the MOG. The production volume is stated to be 35,000t, which corresponds to about 10% of consumption in Germany. The existing providers could have prevented the entry of a large provider through limit pricing. In industries with economies of scale, an intruder can be fended off by preventing them from achieving an optimal business size. The addition of the MOG of the previous market participants corresponds to the demand at the current price level (limit price). There is no demand for another supplier to the MOG. Prices would have to fall significantly on the market. In the case of the coffee roastery, however, this limit pricing strategy could not prevent entry, as the Schwarz Group was confronted with not too little demand, the demand comes from Lidl and Kaufland from its own group. In addition to pure economies of scale, efficient production of smaller batch sizes has become very important in production. For example, MEG supplies non-alcoholic beverages with 300 different items to Lidl and Kaufland in 25 countries. Throughout Europe, there is a great depth of assortment in the assortment that has to be served. Production for third-party customers who are not in a competitive position with Lidl or Kaufland would also be conceivable in the future. For example, Aldi Süd and Nord both sells their own private label produced coffee to all its European markets and the USA, to all their Aldi national companies active in these countries. The disadvantage of verticalization is the high long-term capital requirement with currently high variable and fixed interest rates for the necessary financing and the high fixed cost block. A lack of know-how in production is not an issue in the Schwarz Group. Production knowledge at Food is available. Founded in 2016 and starting production in 2018, ARTiback (150 employees), a producer of frozen bakery products with a focus on specialities, already supplies Lidl and would well complement Bon Back's own production capacities, where the baking classics have been produced on the baking shelf since 2012. Production is very capital-intensive, with fixed assets at ARTiback amounting to EUR 32 million with a gross profit of EUR 15.9 million, according to the last published annual financial statements for the 2021 financial year. The economic situation of ARTiback, with high loss carryforwards from previous years, has so far been characterized by rapid business expansion and start-up losses, although the operating cash flow is now clearly positive at EUR 3.0 million. At EUR 0.1 million, the profit is more likely to be in the black. At the end of the financial year, equity amounted to only EUR 1.8 million. The equity ratio of 5.2% is therefore very low and certainly does not allow for further expansion without new investors. So far, financing has mainly been provided by banks. The Schwarz Group is now the financier for further expansion. However, the purchase price quoted in the LZ in the double-digit million range seems very high given the low equity. ARTiback has not only supplied Lidl in the food retail sector. After the takeover, these dealers will have to look for new sources of supply. Aldi Süd with "Meine Backwelt" is not affected by this in the listing according to Storecheck in Heilbronn. The frozen bakery products are sourced from a variety of other suppliers. In addition to more than 60 regional bakers for fresh products, the top dogs Harry Brot, Lieken and Aryzra Backeries will be there. The large number of suppliers at Aldi Süd is surprising and points to a tendency towards higher process costs. There is no sales risk for frozen bakery products in the future. Consumers will continue to shift their bakery purchases even further to the baking stations of food retailers. The discounters are currently the winners, 39% of the Bach goods are sold at discount according to Gfk figures. Sales increased by 22.5% and volumes by 5% compared to the previous year. It is also predicted that there will be a trend towards regionality, sustainability with higher value, more variety of product ranges and individualised products with lower production volumes. With ARTiback, the Schwarz Group secures additional capacities and competencies in specialties. It is important for the long-term strategy in the Schwarz Group that further strategic investments are made in the business areas that currently generate the cash flow and not only in new business areas such as IT security, container shipping and cloud business. The cash cow in the Schwarz Group continues to be Lidl with its foreign subsidiaries and Kaufland Eastern Europe. The production of the mandatory assortments reliably strengthens these cash flow generators. At the moment Aldi Nord is also speaking with multiple suppliers for a take over one of them is the large German juice supplier riha WeserGold as a potential target. Read more: Die Vertikalisierung im Lebensmitteleinzelhandel ist weiterhin voll in Fahrt – die Schwarz-Gruppe will den Tiefkühlbäcker ARTiback GmbH übernehmen - Kompetenznetzwerk Handel (handel-dhbw.de)

Discount Variety Retail Chain Action Spain (owned by PE 3iGroup) opens its 25th store in Spain and its 2,500th in Europe. Its new store is located in the Oasiz Madrid shopping centre, in the town of Torrejón de Ardoz, where the company already has another space. In total, it reaches 6 stores in the Community of Madrid. The new store, with a staff of 24 people, has more than 1,000 square meters. The establishment arrives in the Madrid shopping centre thanks to Linkmall, a company specialising in marketing. We chatted with its Director of Real Estate in Spain, David Blanquer, who explains the sustainable growth of this Dutch company with a presence in 11 countries. The growth of the brand in our country has been meteoric in a year and a half. "The goal," says David Blanquer, "is to close the year with 26 stores. The next opening will be in Girona next week." In the first year, the brand opened 5 stores in Catalonia. Subsequently, in 2023 they have opted to expand to new territories (Levante, Murcia and Madrid) to 21 openings. Looking ahead to 2024, "we want to maintain the same pace of openings and target new territories on the peninsula to consolidate our presence in the country and increase brand awareness." In this way, Action plans to open "between 30 and 40 stores per year". Next quarter they will expand their presence in Zaragoza, Madrid and Valencia and will land in Segovia and Puertollano. This network of stores will be complemented, according to the director of Real Estate, "by a warehouse in the Toledo town of Illescas, which will begin operating at the end of 2024. With 36,000 square meters, it will serve our network of stores, as the supply currently comes from France." Currently, they are looking for locations with a high population density: "In the case of Torrejón de Ardoz, we have chosen this second store in Oasiz Madrid because we focus on a more regional area since it is located in a commercial area of great attraction for the adjacent towns," adds Blanquer. Undoubtedly, "this growth drives us to speed up the brand awareness we are looking for and customer satisfaction." In terms of investment, "Action's stores always operate on a rental basis, as the company does not have a patrimonial vocation. Thus, we are looking for premises that are around 1,000 square meters, for sales rooms of around 800 m2, with a workforce of between 20 and 25 employees per store," says the executive. Regarding its presence in Spain, Blanquer speaks of "optimism" and a "vocation for face-to-face sales". Spain is welcoming the company's business model and that has led them to set very ambitious targets: "The idea is to reach the same weight in Spain as other countries such as France, with a network of 750 stores, but with sustainable and progressive growth. It is also supported by an increase in logistics capacity of up to 5 warehouses," predicts the executive. "Our concept is the non-food hard discount. We have 6,000 products distributed in 14 families – from toys and handicrafts to household items, gardening, DIY and food. Our added value is the dynamism of the assortment, including 150 new products on the shelves every week," said Blanquer about the "Action Formula". The truth is that Action's commitment is based on the shopping experience and a local business. "We rely on word of mouth and customer satisfaction to generate positive feedback to attract new consumers," Blanquer adds about loyalty. INAUGURATION IN TORREJÓN DE ARDOZ The inauguration was attended by the mayor of Torrejón de Ardoz, Alejandro Navarro, who welcomed this new store and thanked the company for its commitment to the town. In addition, he added that this establishment "is a sign of the importance of this popular discount chain that has great growth and acceptance by its customers. I am sure that with such a good background and the daily work you will have very good results in our city." To celebrate, the brand has distributed 2,500 euros among the first 250 attendees who have attended this opening from 9 a.m., giving a discount voucher worth 10 euros. This voucher can be used on the same day to purchase any of the more than 6,000 products that the company has on its shelves at very affordable prices. "Celebrating this remarkable milestone highlights the efforts of our dedicated team of more than 60,000 Action employees. We really appreciate the warm welcome we have received in Spain since we opened our first store here. It's great to see that Spanish customers like to shop at Action. Looking ahead, we are committed to accelerating our international expansion in the coming years, with the goal of serving millions of customers across Europe," says Hajir Hajji, CEO of Action. Bart Raeymaekers, Action's Regional Director and Managing Director for Spain, adds: "The company's growth plan for the coming years is aimed at creating more local jobs. Since the opening of our first store in Spain in 2022, we have created jobs for a total of more than 550 Spanish colleagues. We are committed to continuing to expand our team to provide the best shopping experience for our customers." Read more: Action reaches 25 stores in Spain and expects to add between 30 and 40 stores per year - Noticias y Actualidad Retail (justretail.news)