Fine-tuning Value Chains in Discount Retail
How top players are recruiting and developing top-flight executives in a competitive market
Eelco van Eijck | Netherlands
Low-cost, high-volume models. A rare blend of discipline and agility. As the cost-of-living squeeze drives value-driven consumption, functionality and convenience, discount retail is on the rise. To sustain momentum, Eelco van Eijck asks: how can we find highfliers with an eye for detail and optimization?
From big picture to detail
Gazing out of a CEO’s office near Düsseldorf, I ask about the huge building lying across the way. “5 years ago, that was grass,” he says. “Today it’s the largest chocolate and cookie factory in Europe – owned by Lidl.” After a long production history, Lidl are increasingly swivelling towards manufacturing. This is just one evolution in one of the world’s oldest industries.
Leaders joining established players such as Aldi, Target, and Mercadona, or relative newcomers like DMart and Dealz, must be shrewd practitioners. Minutely monitoring logistics. Exercising tight category management – illustrated by the industry’s clear-eyed approach to plant-based meat substitutes, or its limited product options. Inspired by their example, one premium chain slashed their range in 10 shops and changed the layouts to emphasize low-cost offers.
Discount retailers have an equally judicious approach to existential questions: should they limit online purchasing? Several think so. Should they diversify? Consider Schwarz Gruppe, the parent of Lidl and Kaufland. In 2019 it launched a cloud business to serve its massive retail IT operations, creating one of Europe’s main sovereign alternatives to AWS, Google Cloud, and Microsoft Azure, serving major enterprises such as SAP.
The 4 key characteristics of discount retail
- Supply chain management: strict, well‑organized, and well‑thought‑through, with minimal cost.
- Category management: forthright decisions about which products to include or exclude.
- Close collaboration with private-label brand manufacturers: turnkey specialists or contract players. Use of in-house and external scientific expertise, testing and certification institutions.
- Elevating in‑house manufacturing capabilities.
Talent – make or buy?
You don’t achieve results like this without robust internal talent development. And discount retailers have unusually long development paths: they encourage people who worked in their stores since school to come back after studying. Like other corporates, they send managers to top universities for leadership development. In-house specialist recruitment teams and executive search firms bring in new specialists - cloud, digital marketing, legal, risk and finance, logistics. The best legacy retailers are embracing innovative concepts and technologies, diversity of thought, whilst capitalizing on what they do best.
But the industry is consolidating, and this risks walling in the talent pool. Fortunately, our footprint enables us to find candidates from around the globe. Family‑owned businesses are often particularly open-minded to go off grid for unknown candidates. Working with the owners or the CEO facilitates such strategic discussions.
Still, some profile aspects remain non-negotiables, rooted in the path from shelf‑filler to store‑floor- and category manager. Supply chain, category management, cost control, and close cooperation with manufacturers are pre-requisites. So too is the omnipresent digital and AI literacy.
Executives in every sector need to balance cost, quality, and sustainability. In discount retail, they are athletes. With 500,000 boxes to open every day, 2 extra seconds to open each one adds up fast. Adding a 4th tomato sauce variant increases operating costs by 20–30%. And on it goes. If a candidate combines this deep knowledge with perseverance and fresh thinking, they can make the difference that retailers need.
The CEO for what’s next
In this sector, today’s top leader is a high-flying eagle - spotting market trends from above, diving into what can work, dropping what doesn’t. It’s about discernment, speed, and wisdom. Incorporating new ingredients into successful management recipes. Mastering a vast web of interconnected elements.
CEOs need big brains and acute self-awareness.
In this focused and intense culture, they also need true grit. An executive psychologist told me: “If your biorhythm can’t handle starting at 6am, you’ll never be a retailer.” The C-suite needs the same attitude as a store manager stocking up two hours before opening. A 35‑year‑old German overseeing 500 discount stores in Australia wanted to bring his fiancée home. His manager objected, insisting marriage would distract him. He replied: “I’m human. I’m happy. I’m leaving.”
Focus, discipline, organization. I know military people who moved to successful careers in the sector. These leaders make brave decisions. The risk in discount retail is falling into the trap of daily issues and forgetting the long term. You must focus on what matters, and know when to abandon what isn’t delivering value.
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