Retail is like Formula One: Marco Hössl

In an era when countless companies pitch themselves as disrupters, à la Uber, or their industry’s answer to Apple or Amazon, it’s refreshing to hear a CEO with a genuinely different take on his company. That is exactly what you get from Kaufland Romania’s Marco Hößl, who turns to the animal world for a surprising analogy on his company’s relationship with its suppliers.

"It’s like with penguins," he explains. "When they go hunting, one of them must have the courage to jump into the water. If it’s not hit by a rock or eaten by a polar bear, the others will follow and start fishing. If no-one jumps, they will all die of hunger. We all want to catch the fish together, so we are on the same page with the suppliers."

Operating on an entirely different business model to local supermarkets, Kaufland Romania, under Marco’s leadership, has been successfully avoiding the metaphorical bears and rocks. Its sheer scale offers a point of difference; each of its outlets offers shoppers a vast array of choices, stocking everything from fresh fruit and vegetables to all the supermarket staples, an extensive range of beers, wines and spirits, gifts, clothing and homewares. The giant warehouse-style stores provide a one-stop shop for consumers and the business leverages its considerable purchasing power to pass deep savings on to shoppers.

For Marco, this form of retail is one he has a wealth of experience in. Eleven years ago, he became Regional Sales Manager at Lidl, a discount chain that, like Kaufland Romania, is also part of the Schwarz Group. From there, Marco moved to a role in that company’s International Sales Department and worked across Europe, as well as launching a branch in Switzerland. Further roles at Lidl as regional general manager followed, before he moved to international sales at Kaufland Romania, becoming CEO three years ago.

Returning to Romania was a welcome part of the role for Marco. "I enjoyed working in several different countries, but I love Romania. So it was a very easy decision to go back."

The hypermarket is the largest of its type in Romania; in 2017, it had a turnover of more than RON10 billion (€2 billion), making it one of only three companies to reach that milestone. It continues to add more stores in Romania and is interested in sites above 25,000 square metres, including anchor sites in retail developments. Marco believes there is significant scope for growth and anticipates it will have 126 outlets nationally by the end of 2018.

Kaufland opened its first Romanian store in a real estate complex and its first summer hypermarket set-up in a tent at the spa resort Sovata, as well as a gourmet pop-up restaurant. Marco says it is vital to continue trying new things and pushing boundaries. He views any business as doomed if they stop growing and fear change.

Headquartered in Neckarsulm, Germany, the global company’s biggest markets are Germany, Romania, Poland and Czech Republic, in that order. It also has a footprint in Central and Eastern Europe and will be expanding to Australia in 2018, marking its first move into an English-speaking country.

Marco says Kaufland has undertaken a comprehensive modernisation and restyling process over the past few years, with the ultimate goal of refreshing the instore experience and making the outlets as customer-focused as possible. "We are really motivated to keep offering clients the newest and most modern shopping experience," Marco says.

New stores have a modern, light-filled design and were constructed to adhere to the company’s philosophy of minimising its environmental impact. Biodegradable shopping bags are used and the air-conditioning systems do not use oil or gas.

To optimise the instore experience, it has introduced Scan & Pay, a pioneering self-checkout app that allows customers to speed up the shopping process. "We are implementing modernisation in terms of both micro and macro sales. This will be a continuation of our organisational culture, which is focused on openness.

"We were bold enough to become trendsetters in some ways," Marco explains. "We reinvented the classic concept of the hypermarket. If you run after too many trends, you don’t get the time to be a trendsetter yourself. It’s more efficient to direct the trend in a way it is already pointing. A business must always adapt, but what’s extremely important is how you do it."

"If you run after too many trends, you don’t get the time to be a trendsetter yourself."

Committed to CSR

The company’s all-encompassing commitment to corporate social responsibility also sets it apart from its peers. It has been involved in hundreds of CSR projects, often in collaboration with NGOs, spanning environmental protection, energy efficiency, education, health and the promotion of healthy lifestyles, and participation in sport.

One interesting project saw it transform rooftops and parking spaces around the stores into thriving urban gardens with flowers, aromatic plants, fruits and vegetables. Some stores are involved in ‘Gradinescu’, a network of community gardens on store rooftops, in parking lots and in nearby schools. Members of the community are able to ‘adopt’ a space in these gardens and grow their own produce. These spaces aim to teach children about the value of growing your own food and to instil healthy eating habits.

However, it’s not just its own spaces that have benefited from Kaufland Romania’s green thumb. It also helped fund a program to plant grass on the roofs of tram stations across the Romanian capital of Bucharest. The completed gardens help lessen air pollution and lower noise from the transport system. Each roof also absorbs around 130 kilograms of carbon dioxide each year.

Kaufland’s commitment to sustainability extends beyond practical measures such as the garden initiatives to providing resources and guidance to others looking to implement sustainability measures in their communities. To this end, it co-founded the Embassy of Sustainability in Romania in partnership with the CSR Agency. Housed in a historic Bucharest building, it brings together community and business leaders to plan and discuss initiatives that will further civil society, environmental protection and socially responsible business. Meeting rooms and a multimedia space make it an ideal space for learning and bringing people together.

Social responsibility is also integral to its procurement policies and in-store range. The hypermarket has introduced an array of eco and Fair Trade-certified products as well as its own brands (which include many organic and vegan products).

The modern hypermarket

Maintaining organisational agility is vital in this industry where success depends on teamwork, preparation and precise organisation, Marco explains. "Retail is like Formula One. Even if the rules change suddenly, an unknown team is still not going to win tomorrow. In order to have pole position, you have to already be in good shape during the training sessions. Challenges come and go. But if your first instinct is to find a way forward instead of finding others to blame, you will always find there is a solution to everything."

Just as a successful racing car team depends on both implementing the latest technology and getting the basics right, Marco insists that its interest in modernisation and innovation will not result in the company neglecting its core business.

"It is essential not to forget about our organisational culture and that the success belongs to the owner. We will constantly improve and fine-tune the attributes that really matter to the client, such as freshness, variety, ambience and courtesy. At Kaufland, we are built around ideas and this is a mindset shared by all our colleagues across our chains of command."

The catalyst for many of these updates was internal discussion. "If you work in a supportive environment, people feel free to share ideas; and ideas breed further ideas." This approach is shared across the Schwarz Group, where Klaus Gehrig values innovative thinking and staff autonomy. This approach keeps Marco and colleagues grounded. "It helps to always think of people first. This applies to customers, employees and partners."

Kaufland Romania wants to be more than just an employer and encourages input from its staff. Other incentives include employee benefits such as meal vouchers, bonuses, general leave entitlements and free classes at work, including yoga sessions, nutrition education, stop smoking support groups, and gym facilities complete with personal trainers. Staff can also tap into discounts on products ranging from banking to holidays.

Standing for freshness

Kaufland recently introduced its ‘I Want from Romania’ range, featuring products exclusively made within the country. It is also working with farmers through its ‘Romanian Shelf’ project to increase local pork production. The project will eventually see around 300,000 pigs being raised across the country to reverse a trend where most pork is imported.

Its determination to source the freshest and most flavoursome fruit and vegetables sets it apart, Marco says. "We are standing for freshness here. A lot of the hypermarkets offer a lot of products, but our market advantage is fresh and local products."

In line with its focus on fresh produce, Kaufland Romania has a shorter supply chain than many of its competitors and most of the products it sells are made in Romania. Consumers benefit from fresher food, while Kaufland is able to support the local economy and offer more competitive prices. Marco says this approach is supported by many long-term relationships with local suppliers. "Our strategic approach is to collaborate," he says. "Our approach is fair, and our strong relationships with partners and suppliers help us offer a great experience to our customers."

"Our approach is fair and our strong relationships with partners and suppliers help us offer a great experience."

Aiming to set the industry standard, Kaufland Romania strictly follows ethical guidelines and rules around the social and environmental sustainability of the food it sources. It also works with its partners across the supply chain to ensure best practice in business and social impact. Any issues in the supply chain are handled through a dedicated virtual dispute resolution office, where any supplier can lodge a complaint if they feel they have been disrespected or that Kaufland has diverged from its standards. "We are always happy to work with partners who showcase a strong social or environmental responsibility and do everything in our power to support them."

It has worked closely with more than 18 fruit and vegetable producers to help them gain the prestigious GLOBALG.A.P. certification, which requires hitting benchmarks in terms of food production and safety. Once accredited, the suppliers are able to export their produce. Kaufland Romania’s involvement with farmers seeking this certification includes financial support (in conjunction with the International Finance Corporation), educational workshops, field analysis and customised development.

In 2018, Kaufland Romania achieved ISO 50001 energy certification for all its shopfronts, warehouses and headquarters, which requires recipients to implement and regularly audit environmentally sound energy management systems. Kaufland has also implemented advanced information technology systems to monitor the journey of produce from suppliers to stores and to reduce food wastage. Further, in conjunction with Renovatio, it realised the first fast-charging network for electric and hybrid cars in Romania, with free facilities available in parking stations at many of its stores.

As part of the same project, the company also purchased a small fleet of electric cars and donated them to NGOs, including Hospice Casa Sperantei (which provides respite for terminally ill patients), Habitat for Humanity and Let’s Do It, Romania!, a popular social movement which mobilises people one day a year to collect all the rubbish and debris across the country.

Beyond this charitable giving, Marco says the hypermarket has also voluntarily joined a number of initiatives that promote fair trading and sound business practice across food supply chains. "Our business is to be there for people, to help them improve their lives. This is why our vision integrates business with responsibility and care for the people we work with and for."

"Our business is to be there for people, to help them improve their lives."

Asked about Kaufland’s future plans, Marco says it will double down on its socially responsible approach. "We will take even more care and help even more people. This means we’ll place priority on social and environmental issues. We will consolidate partnerships and take care of the happiness of our team."

As a manager, Marco describes himself as a collaborator and facilitator. "Ultimately, I don’t just want to speak about my own achievements, because the achievements and overall performance of the company is down to my team here in Romania. There are a lot of projects, but my main task is to ensure that the right people are in the right place within Kaufland and that their ideas are not cut down before they have a chance to grow. Employees need air to breathe and they need space to develop themselves within the company."

Kaufland Romania’s Marco Hößl offers a word of advice to his counterparts who may be prone to taking the credit for the work of others. "When mistakes happen, I look in the mirror first. But when we are successful and innovative, I look out of the window and know that it was because of my team."