Asia Pacific now has an 11% share of revenue – almost double its 6% share in 2015 – under the direction of Max Heinemann. He will return to Hamburg this summer to take up a position on the Executive Board and ensure a fifth generation of the family stays at the helm. Despite the Asia Pacific gains, Heinemann remains very much a European business driving 84% of revenue (85% in 2016).
Developments in Europe – notably Turkish operations and the vast Istanbul New Airport – are set to make the company even more Europe-reliant. Globalisation strategies sound good in theory, but in practice the unpredictability of the DF&TR business – especially the tender process – can make it difficult to actively reshape regional portfolios, for any retailer.
A fine balance to strike
Heinemann must also consider where its wholesale/distribution business – the plank on which it was built in 1879 – is heading. Last year group-wide distribution turnover slipped by -5.8% to €854m as retail sales soared +10.6% to €3.2bn.
Retail now has a 78% share of turnover (75% in 2016), and distribution 21% (24% in 2016). In previous years the shares were even closer. In 2017, the distribution division itself saw growth of +7.5% because it integrates pure wholesale activities as well as retail sales.
Heinemann’s wholesale/distribution business is integral to its success. It ensures the company deals across a very wide range of customers, allowing it to pick up on certain trends quickly. Supply operations also offer valuable insights to locations where the company may bid for concessions in the future.