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Long live the king!

I keep hearing over and over that the hypermarket is dead.

Not sure Walmart or Costco would agree.

In Europe, the hypermarket model is certainly facing challenges – especially in France, a country that once led the way in adopting the “everything under one roof” format.

Several structural shifts have reshaped the landscape: smaller households, increased urbanization, rising pressure on living (and storage) space, worsening traffic, and the growing number of people choosing not to own a car. All of this has changed how and where people shop – but it’s far from a death sentence. 🙂

Hypermarkets have always been a reflection of evolving consumer preferences. They adapted over time – offering books, video tapes, holiday packages(!), and mobile plans when those were in demand. Later, shifting focus on textiles, electronics, toys, stationery, and home decor as those categories grew in demand. The appeal was always clear: convenience and choice in one pit-stop. So it’s normal that today’s hypermarkets look and feel different. The assortment is more streamlined, the footprint is smaller, but the variety of selection remains unmatched by any other format – even the one with the “infinite shelf”.

In France, hypermarkets continue to lead innovation: building local partnerships, promoting small businesses, collaborating with brands, experimenting with private labels, and acting as key destinations for value-conscious shoppers.

French consumers, in particular, are highly promotional in their behavior. They rely on printed and digital flyers, carefully comparing deals and building their shopping trips around the most attractive offers.

And while both hypermarkets and supermarkets have lost nearly two percentage points of market share to online channels over the last five years, a closer look tells a more nuanced story. Around half of that loss – one percentage point went to “drive” (click-and-collect), which is owned and operated by the same groups that run hypermarkets. E.Leclerc, for example, is one of the leaders in this transformation. In that sense, “drive” represents not a loss, but a rational evolution of the hypermarket model to fit modern consumer lifestyles.

Online retail is undoubtedly growing, both in France and globally thanks to commoditization of electronics and non-essential non-food products. But food, because of its sensory, logistical, and experiential nature will hardly be dethroned from physical stores in the near future. This gives both large and small formats room to thrive, as long as they carefully manage assortment and costs, foster strong local partnerships, and continue to offer extra services that satisfy, pamper, and delight shoppers.

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Unilever

Oh boy!

A CEO who set out to reshape Unilever ends up ousted mid-operation…

Here are my personal reflections on Hein Schumacher’s sprint at the top of UL:

Job cuts: A plan to cut 7,500 jobs, yet sluggish and chaotic execution created confusion, mistrust, and a lack of confidence.

Divestments: The sale of brands and entire divisions led to prolonged uncertainty, internal turbulence, legal challenges, missteps, and lost opportunities.

Unfinished spin-offs: Efforts to offload beauty, tea, and ice cream businesses met mixed success, with the Ekaterra sale already under scrutiny for underperformance—risking a spiral of further job cuts.

Structural changes: A complex vertical split reduced middle management but created a layer of executives with limited influence. An ongoing power struggle between the two offices (an inherited vice?) further complicates steering the ship.

Sustainability shift: Once a pioneer in responsible business, Unilever’s drive and commitment have faded. Drill, baby, drill!

Finally, in pursuit of financial gains, Unilever is losing the confidence of its long-forgotten customers. Inflate and shrinkflate all you want, but the reality is clear – declining market share in key categories is a vote of no confidence in Mr. Schumacher and the board by the ultimate decision-makers: consumers.

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Breathe!

I have previously reflected on the golden rule – or any kind of rules, traditions, etiquette, protocol, and other norms and biases that shape who we are, what we do, and how we live” ( https://lnkd.in/dBMfDyj )

In light of recent geopolitical developments, people are polarized. They take sides. They invoke “rules,” “dress codes,” and “common sense,” reducing the discourse to a simplistic battle between “good guys” and “bad guys.”

But reality is rarely black and white. Just as adding color to white paint and gently stirring creates something neither fully white nor fully colored, our world is full of shades, layers, and complexity. It is diverse, beautiful, and unique. Yet if you keep stirring, everything blends into a dull, monochromatic shade.

Our societies, the world we live in, are rich in diversity and uniqueness. And that is beautiful. Just look at your desktop – I bet Microsoft or Apple has placed a breathtaking image there right now.

“To the victor go the spoils,” said U.S. Senator William L. Marcy in 1832, popularizing the spoils system that rewards donors and political supporters with government jobs. The system is old, well known, and flawed.

When Donald Trump first announced his bid for the presidency, his policies and worldview were clear. It’s his second term for crying out loud! We should stop acting surprised. We should all calm down and breathe deeply.

In a world where rules exist to be bent and broken by the so-called “victors,” just step back and get inspired by nature.

The ultimate victor.

The only force that holds all the gold – reshaping continents, raising and lowering mountains, flooding, burning, and regenerating forests and valleys in an eternal cycle of life and death. Yet, no one calls nature evil. We, humans simply adjust, and learn to coexist with a deadly, unpredictable neighbor.

Tokyo, Jakarta, San Francisco, Los Angeles, Mexico City, Naples, Miami, Istanbul – around 300 million people live in cities that nature could reclaim at any moment. And yet, all we care is what someone wears in the “cherished Oval Office”?

Breathe!

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The Big FIX

In their book “The Big Fix”, Denise Haern and Vass Bednar, among many difficult pain points, touch on emerging issues in e-commerce. It resonates deeply with my professional perspective and the struggles I have personally experienced as a consumer.

“What initially made e-commerce so great – primarily, the ability to quickly search for product comparators across a range of stores and geographies, price compare, and be informed by reviews – has become unnecessarily difficult and disorienting. It’s not just counterfeit products. It’s getting harder to make the best possible choice when you shop because firms of all sizes do sneaky things like preference their own products, make inflated claims through undisclosed influencer marketing, secretly change the shape and size of their products, degrade product quality, or rush you to buy things online through deceptive hurry-up design. Our trust is being manipulated and exploited, and the tactics used by firms to take advantage of consumers are making markets less knowable and more confusing”.

Through selling ad words, tweaking search results by adding “sponsored content,” or guiding shoppers away from their initial search toward the product retailers are incentivized to sell, I ask myself: where does the border lie between providing shoppers with what they want and enforcing on them what brands want them to buy? And to what extent is retail complicit?

When does marketing end and marketeering begin?

hashtag#The_Big_Fix
Image source: https://lnkd.in/eetyaeB2

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French Retail Evolution

French retail continued its strong transformation in 2024.

Non-food, petrol, and apparel remain among the biggest “casualties” of post-COVID consumption decline.

Hypermarkets are still the preferred shopping destination, as shoppers continue to hunt for promotions and save on volumes.

The rebound of click-and-collect (which peaked at 12% during COVID) is primarily driven by E.Leclerc’s widely publicized low-price strategy and shoppers’ desire to control “out-of-pocket” spending.

The same logic applies to proximity stores, where lower basket sizes provide a strong incentive to avoid driving to the hypermarket, saving on petrol and impulse purchases.

2025 will be a year of:
– Continued hypermarket share decline, with ongoing decreases in non-food sales driving the need for space optimization. The convergence of hypermarkets and supermarkets now seems inevitable.

– Click-and-collect will continue its growth, as retailers begin implementing AI agents to facilitate recurring purchases, introduce virtual personal shopper, or a chef.

– Uncertainty around failing EDLP concept. Will Lidl’s new management be able to stabilize company’s market share and reach break-even? And will Aldi remain in France at all?

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Gnarly Problem

In his recent book The Crux, Richard Rumelt introduced the notion of the “Gnarly Problem.”

For non-English speakers, gnarly is an American slang word, defined by the Merriam-Webster dictionary as “very difficult or challenging to deal with, nasty, unpleasant, gross”.

Gnarly Problems are complex (involving multiple moving parts), have high uncertainty, and lack a clear and linear path to resolution (goodbye Game Theory!).

Solving such “gnarly problems” isn’t just about analysis or analytical skills, it requires strategic insight and bold decision-making.

Many industries, including retail, encounter gnarly problems today. French consumers, for example, have created a paradox that has no straightforward solution.

On the one hand, French consumers want to spend less (the FMCG market is in slight decline). On the other hand, they reject EDLP (Every Day Low Price models), putting pressure on Lidl and Aldi and boycotting Amazon.

Surprisingly, the only sales channels that are growing are the ones where products are sold at a premium – proximity stores and click & collect.

Proximity is a very challenging channel (high rental costs, restrictive supply, limited space for stock), while click & collect suffers from lack of choice and scale, high software and hardware costs, and full dependency on the physical store’s stock.

Both channels are normally subsidized by larger store formats that benefit from scale (price and assortment, supply chain efficiency), unplanned/impulse purchases, bundling, and other irrational spending behaviors.

The crux of the challenge for French retail is how to attract shoppers to profitable sales channels while nudging them to accept “fair” prices in the fast-growing yet unprofitable ones…

For example, the pressure on France’s iconic hypermarket format (50% market share before COVID, 38% by the end of 2024) has led to massive layoffs, wiping out tens of thousands of jobs. The textile, non-food, and beauty industries are in dramatic decline due to their reliance on hypermarkets and the shopping galleries. Small businesses, unable to offset consumer behavior changes, are going bust.

A recent IRI study showed that the widely popularized “buy local” trend accounts for no more than 3% of total FMCG sales. The market is still dominated by international conglomerates.

To me, the clear winners in the next decade will be those who can:

* Build an ecosystem around shopping centers – creating communities by combining retail, activities, and leisure. Retail is about experience.

* Redefine stores – dramatically reducing assortment, focusing on local produce and own brands, and selectively working with international brands that truly need the partnership (instead of chasing those who don’t).

* Partner with shoppers – creating transparent value chains and incentivizing the right choices (e.g., buying from small local stores in galleries, supporting sustainability efforts).

How do you see a solution to retail’s gnarly problem?

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French retail update

The French FMCG market is slowly recovering from the shock of new legislation. After a 10% drop in both value and volumes during Easter week, the market has rebounded to +1.2% in value but remains negative 1.6% in volume. Why?

Unsurprisingly, the supermarket format is growing as the limit on promotion and maximum margin on farmers goods remove all insentive to drive to a periphery for overstocking. E-commerce is in a fall (-5% versus last year). As mentioned earlier, a few weeks ago, the last pure quick-commerce player have shut their doors in France. What is wrong with E-commerce in France? Wasn’t it the future of retail?

Thanks to new legislation that limits promotions, home and personal care categories are down about 10% in both value and volume.

This is a slightly better performance than the -15% seen last week, but there is still no promise of recovery on the horizon.

On the other hand, the annual inflation rate has slowed down to 2.2%, which is likely linked to the consumption drop. However, the risk of deflation and subsequent recession is obvious if things remain unchanged.

Several retail CEOs and VPs have requested an audience with Emmanuel Macron. Let’s see if that bears any fruit (meat or cheese).

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Friendly negotiations (continued)

So, naturally, you select the Labrador!

You wait in the lobby, but Mr. Labrador is late. You wait a bit more, but no one comes. You ask the receptionist to remind Mr. Labrador of your presence. Finally, after 40 minutes of waiting, you are moving into the meeting room with a friendly chap.

You present yourself, fresh from the top business school, just being promoted from the category position. Mr. Labrador is at least 20 dog years older than you and completely overwhelms you with anecdotes of the great times he had with your pre-pre-predecessor.

He knows the job, he knows your company, and he knows how to help you influence your superiors in order to get what he wants. You chuckle politely, thinking of the German Shepherd ready to shred you to pieces if you yield.

You come with bad news for Mr. Labrador. You must raise your prices and cut the marketing budget at the same time.

Select your strategy:

Strategy 1: Don’t shoot the messenger.

Mr. Labrador knows Hoof & Bone rather well (in fact, better than you). It makes no sense to hide things from him; let’s be as straight to the point as possible. So, you explain the VUCA, the Red Sea, the viruses, and wars. In fact, you have a slide for each of the four horsedogs of the apocalypse. Finally, you announce that the firm gave you no choice but to protect its very 150 years of existence by simultaneously raising prices and cutting promotions. Take it or leave it; the decision is from the top dog, and even the market-leading retailer Nile.com has already accepted the new tariffs and thus reaps the increased profits.

Strategy 2: Veni, vidi, vici.

Remember, you are a pure-blood descendant from the now-extinct wolves. You have never been tamed. You are wild and ambitious. You want to use the old chap as a trampoline in your career. So, you tone up your presentation: the VUCA, the Red Sea, the plagues, and the wars.

But you show another slide at the end, where the prices must rise even higher and the austerity is almost complete. Surely, the old Labrador will not be able to sniff the foul game and will collaborate fully. But the German Shepherd might shred some other account to pieces and maybe give you a raise and promote you to a better account next year…

What is the best strategy according to you and why?

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Friendly negotiations or a fearsome fight? What is best?

Imagine a planet where the dominant species are dogs. The world is just as similar to ours, yet instead of humans, there are dogs. Building skyscrapers, driving Maseratis, and negotiating deals, ok?

You are a professional key account manager of Hoof & Bone, a 150-year-old market-leading conglomerate, and you come down to visit an ordinary customer—nothing special, just a “meh,” let’s call them “MeowMart”.

But that’s all you’ve got as a job. Your career depends on this one. You are a straight-to-the-point, no-nonsense Husky. Your boss is a German Shepherd, she demands higher than the market revenue growth, sits tight on your trade marketing spendings and can calculate ROI faster than MS Excel.

Imagine at the MeowMart reception you learn that there are two buyers who negotiate with suppliers in your category of goods, and in fact, you are free to choose any one of them as your key negotiation contact.

Whom would you choose?

Buyer 1: a Labrador – loyal, friendly, and cooperative.
Buyer 2: a Pit Bull – mean, ferocious, and unpredictable.

Write below in the comments who and why would you choose!