At the close of the millennium’s first decade, it’s timely to cast an eye, both back to 1999 and forward to 2019. Parallel leitmotifs arise from opposite directions, across the channel and across the pond.
Carrefour’s fin de siècle merger with Promodès was triggered by Walmart acquiring Asda in 1999. Walmart and Carrefour top the 2009 world table but will the French fusion still be rebutting Bentonville in 2019? The odds will shorten if Carrefour’s market cap continues to languish.
Global number three Tesco entered the States 10 years after exiting France in the late 1990s. Surely its US future in the next decade must depend on more than just organic growth?
Once upon a time (the late 1990s) Borders entered the UK; in 2009, it entered administration. But Amazon lives happily ever after. In 1999 its UK/German websites had first-year revenues
of $168m (£103.6m). In the first nine months of 2009, its international sales exceeded $7bn (£4.32bn) – almost half estimated from the UK.
France is one of Amazon’s weaker markets – largely due to Fnac, a jewel in the PPR conglomerate that’s now reportedly up for sale. Could Fnac tempt Amazon, the most famous of all the ‘clicks’, to venture into ‘bricks’? By 2019 the web will pre-determine channel strategies for every retailer, but how many will be pure-plays?
Many will be specialists. Kingfisher cemented its DIY future in 1999 when taking control of Castorama. Its other subsidiaries were then gradually unanchored, to meet very different fates: Woolworths, far from its severed American roots, becoming the spectre of many visible voids on British high streets in 2009; Comet, like its former parent, offering proof of prosperity for Anglo-French relations. Our American cousins are more than likely to have gate-crashed some DIY and electrical goods’ parties come 2019.
In December 1999, the market cap of Comet’s rival DSGi was more than three times that of Morrisons; today it is six times smaller. DSGi’s ill-fated sortie into the States, in an earlier decade, has cast a long shadow over the group’s international fortunes; the withdrawal of PC City from France heralding this year’s disposal of Electro World in Hungary. How will the lights be kept on at DSGi in the next 10 years?
Marks & Spencer’s 2009 announcements uncannily echo 1999’s, when the then chairman relinquished his dual role of chief executive while reporting profits far below the previous year’s magical £1bn-plus.
In 1999 M&S opened more than 25 stores in the US, France, Benelux and elsewhere. In 2009 its overseas sales soared 25% (but neither in France nor the US). The appointment of an astute marketer from Benelux as chief executive will surely advance its expansion in Europe and elsewhere. But will even he manage to reintroduce M&S’s much-missed sandwiches triangulaires to the Boulevard Haussmann?
2010 will also be a personal turning point. On February 1, after nine years in the role I created for PwC, I shall hand it over to another expert adviser. I shall be continuing to provide PwC with my retail expertise but become freer to expand my other appointments and assignments. A happy Christmas to all my readers.
- Michael poynor chief retail adviser to Pricewaterhousecoopers
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