Top management changes in retail sector are not surprising

Tjeerd Jegen, the head of Real Romania, the manager who oversaw the fastest-paced expansion of an international retailer on the local market, 13 stores in three years, has decided to leave the company. He is part of the “blitz-krieg” retail manager generation, who acted fast during a time of skyrocketing consumer spending.
Jegen’s departure is the third such big change at the top of the modern food retail. In May, Metro Cash & Carry, the biggest division of the Metro group announced the return of Romanian Dusan Wilms for a second term as CEO of the network, replacing Francois Olivier. In addition, at the end of last year, the French at Auchan brought an Italian manager to run their local network, after taking over the company entirely.
The top management changes are not surprising, given that retailers are faced with an unprecedented decline in demand in Romania since their entry on this market.
“Since 2000 until last year, the competencies of a top management team in retail had focused on the expansion know-how (…). Companies in the trade sector are now faced with operational or strategic challenges, which sometimes require a different set of competencies,” explains Ionut Pascu, project manager of Roland Berger Strategy Consultants company.
This year the development of the hypermarket chains and cash & carry networks has lost much of its speed, as shown by the data revealed by the major operators in this field. For instance, the retail stars in 2008, the hypermarkets, will expand at half the speed this year, given that initial plans indicated investments in expansion would maintain or move faster than in the last two or three years.
Dutch-born Tjeerd Jegen, who decided to leave Real, is the manager that supervised the most ambitious expansion project in local retail. During his term in Romania, the network opened 13 hypermarkets by investing 20 million euros in each of them on the average, reaching 21 operational stores. He was entrusted with the task of catching up with the French at Carrefour, Real’s biggest rival and the first to have entered the market (in 2001), in a very short time.
To make room for a new retail brand on the Romanian market, Jegen started a strong marketing campaign, which some of his competitors say is the most expensive on the market. At the beginning of this year Jegen said he would not cut the marketing budget of the network but save money from other sectors. The company has a 30-40% higher marketing budget in 2009 than last year, according to the data previously provided by Real’s officials.