Glynn Family - European Update Spring 2004

To All,

It’s been a while since we’ve published our family update on life on the other side of the planet. I’m sure many of you are thankful! For a while I wasn’t sure if we’d just lost our sense of humor or possibly we’d simply become used to this place and felt that things and situations that once seemed odd and entertaining are now completely normal.

It was impossible to have a sense of humor in the winter here in Bonn. It was cold and grey for months on end and we all feared the sun would never shine again. Being much further north than California meant that the days were short and the nights were long for far too many days. Now that spring and summer are upon us, the days are growing much longer and the sun comes out on a regular basis. Our senses of humors are returning.


We had our German tax returns audited.

In Germany they give you money for having kids. The term is “kindergeld”, which roughly translates to children’s money. It is very unclear as to who is actually entitled to receive this money. I have talked to a number of ex-pats over here and some get it, some do not. Some have applied and been rejected, but other people in the exactly same situation and fact pattern were granted the money. It appears to be luck of the draw and the local bureaucrat you get to help out. Dianne and I never bothered to apply for the money, because any government money we receive would have to be returned to Dianne’s company. Several people in Dianne’s company do get the funds and then owe the money back to the company when it comes time to pay the tax bills.

After Dianne’s company filed our tax returns, we got a notice in the mail asking how come we had not put our kindergeld on the tax return. We showed that we have kids, so there should be income shown. We sent the letter to the Ernst & Young tax department, explained that we didn’t get the money, and could they please inform the German government.

A little time passes and we get another notice saying they received our letter, thanks very much, but we needed to prove that we didn’t get the money. Of course, they didn’t explain how to prove a negative. We came up with the brilliant idea that the German taxing authorities should simply have called the kindergelt department, run our name through the computer and find that we, in fact, did not get the funds. Per the taxing authorities, it is not possible. “nicht möglich” is a favorite response to most logical questions – not possible.

After discussions with Dianne’s tax department, their advice was to apply for the funds. We applied, and of course, we were promptly denied, citing a provision in the tax code that stated that American ex-pats were not allowed to receive the funds. Of course, we are Canadian, and many of Dianne’s co-workers, all American ex-pats, were receiving kindergeld. We had no intention of appealing, rather we simply sent the rejection letter to the taxing authorities and we now believe that our tax problems are behind us. When you think nothing could be more confusing or complicated than the American IRS, along comes the German government!


We Went on Vacation to the Canary Islands

The Canary Islands are Europe’s version of Hawaii. The islands are off the coast of Northern Africa, but belong to Spain. You can get warm weather by Easter without visiting Asia, the Middle East or Africa.

We used the Internet as we have done in the past to find a place to stay. We have always had good luck. We rented an apartment from a British couple on one of the Islands that was made up of predominately British and German tourists. The place was close to the beach and even had a pool and satellite TV. Kira was thrilled to be getting a pool and a chance to watch English TV for the first time in a year and a half.

Our flight left from Frankfurt early in the morning so we decided to do the hour and a half drive the night before and stay the night in a hotel by the airport. After arriving, Dianne and I talked Kira into a little babysitting job (paid of course!) and we wandered downstairs for a drink at the bar to get our vacation started properly. The place was very nice and we were jut getting through the first round and thinking about the second when one of the patrons pointed out to the bartender that he would like to have a cigar from the many displayed in a beautiful glass case. I’m not a cigar expert by any means, but there were cigars from around the world, including Cuba (which I think are supposed to be good??). Within minutes a couple of others also requested cigars. Dianne and I were sitting and watching the formal procedure for opening and lighting the cigars when their smoke began to fill the room. Within seconds I started to cough mildly, trying not to let the smoke bother me. In the next minute my eyes were watering uncontrollably and I was coughing like someone about to die from some horrible disease. Plans for round two were quickly modified and I had to make a dash for the exit as the guests all stared at me crying hopelessly and coughing like a maniac. I waited outside for Dianne to pay the bill. I was glad to be rid of Germans and their smoking, if only for a while. I couldn’t wait to spend time with a bunch of Spanish folks and only hoped that they were not as heavy smokers as the Germans. (I sure do miss California!)

Regarding our trip planning, we made a lot of assumptions and didn’t ask enough questions, as we found out later. When we arrived, we found out that the apartment was in the German area, not the British area as we had assumed. Of course the pool was out of commission and the satellite TV was hooked to the German networks. The walk to the beach was 15 minutes downhill, 30 minutes back uphill, not quite “close to the beach” especially with Conner in tow.

Germans love all-inclusive package deals. They often book at the last minute and are very aggressive about finding low prices. These all-inclusive places serve buffet style breakfast, lunch and dinner at the hotel. As a result of this, and the fact that we were in a German tourist area, meant there were only a handful of restaurants. Thousands of tourists and there was practically no where for us to eat. We had originally planned to eat dinners in, and lunches out. We ended up frequenting the same couple of restaurants multiple times.

Germans love sun bathing. Everyone was lathering on the sun tan oil, getting as dark as possible. I guess they don’t have skin cancer over here. Many of the women were topless, but of course they were all 80 years old or weighed-in somewhere over 200 pounds. Now I know why we have laws to protect us from these sort of sights in the US. The only thing worse was what appeared to be a new fashion craze (OK, maybe I’m a little out of touch!), and that was men in thongs. I hope you are never afforded the agony of seeing a 300 pound man in a thong, strutting down the beach as we were subjected to! But the crowning glory occurred when Thursday before we left, Kira and Dianne were sitting, quietly reading and mind their own business, when a man, about 100 feet in front of them, decided a full frontal nude sun tan pose was appropriate - now we have seen everything!

Of course, I stood out like a sore thumb, wearing a baseball cap, shirt, long shorts and sandals. Any part of my body that was exposed to the sun had sun block at the highest rating possible. I was there for a week and I hardly had a tan.

The beach was wonderful and there was white sand for miles. Conner loved the beach and still talks about it. The brochures mentioned that the island was the windsurfing capital of the world. I thought that was pretty cool, not that I surf or anything. It didn’t occur to be that the first part of “windsurfing” is wind, and we quickly realized that this beach was going to have a very strong wind for the entire vacation.

By the way, there are no Spanish people on the island; no Spanish restaurants and no local “flavor”. Welcome back to Germany, only warmer. We did get a chance to meet the person caring for the house a bit. He was German. When he found out we were from the US, he proceed to inform us that he was very concerned about terrorism in the world. Before we had a chance to say anything, he made it clear that George Bush was leading us all into Armageddon. About three minutes of complete silence after his comments, Dianne and I quickly moved the conversation on to more pleasant topics, like the weather. Politics is NEVER something to discuss with a complete stranger, especially without a beer in hand and three or four in the belly! We were thankful the conversation never came up again.

I’m glad I have the ability to learn from my mistakes in life.

Conner ensures that on every family vacation Dianne has been duly "blessed by him" - for those of you who do not remember the flight home from California at Xmas included vomiting on Dianne soon after the plane took off - of course Conner had a change of clothes - although I think the others in the plane wanted Dianne to parachute out! This trip was not exception - our last Friday on the island Conner is sitting quietly on mom's lap at lunch and soon Dianne feels warm and wet - Conner peed a lake on Dianne leaving her to dry off in the sun while he, of course, had another change of clothes!


Family Update

I am happily in a routine and have been keeping busy. The only remotely interesting thing going on is my upcoming bike trip to climb the French Alps. I’ll send out another annoying update on that when I get back.

Kira is happy at school and as I’ve stated before, she will be sad to move back. She is working on boyfriend number two. I guess one year was enough for number one. We never did get the full scoop on why they parted company, but they still seem to be friends. Goodbye Trenton, hello Kyle. Kyle is a year older and his hormones are raging nearly as high as Kira’s. I’m trying hard to be a “cool” parent and I am working hard at being communicative. However, I have already had several discussions with Kira with such topics as, “it’s OK to hold hands in front of parents, but making out is not appropriate”. I must be getting old.

Conner is a happy young kid and is doing very well. He loves to go to his little preschool/day care and our mom & me toddler group. He talks a mile a minute and we understand about half out what he says. I am teaching him well. He is working on potty training, but this seems more important to his parents than it is to him. We have good days and bad days.

Dianne has been extremely busy at work. She was assigned a client from hell in Italy and has been there for most of the past four weeks. People have flown in from different parts of Italy, as well as France, Germany and Greece to help out. We miss her a lot, but when she does come back occasionally, we get to howl with laughter with great stories from expats around Europe as they bemoan life overseas. I’ll leave most of the story telling to Dianne, but will pass on a few of my favorites.

Greece is a place of corruption, bribery and shoddy workmanship. None of the locals seem to mind. When sewer pipes where laid, the pipes were too small to accommodate the needs of the population. As a result (OK, this is a little gross so feel free to skip ahead), you are not allowed to flush toilet paper down the toilet. Think, wipe and discard. Keep in mind that there is no air conditioning in the country and you can imagine what office and public washrooms smell like on a regular basis.

Years ago Greece applied to the European Union (EU) for funds to help build a twin boar tunnel through a heavily congested area. The EU agreed and stated they would pay in installments as the work was completed. The Greeks finished the first boar grossly over budget and did not have the funds to complete the second boar. Someone came up with the brilliant idea to start the second one, and then paint a large mural just inside so as to appear that the tunnel was almost done. After completing the picture, EU officials were driven to the first boar and then quickly past the second. The funds to complete the remaining boar were released by the EU. The tunnel was never completed and the mural still stands today.

As you know, Athens is preparing for the Olympics - although this preparation should have begun 4 years ago....Recently they had a bike road race test to see how the course on the streets might work. Athens has a severe wild dog problem. The Greeks do not believe in euthanasia but rather castration and release - so the road race began and for the next 50 miles the cyclists were darting in and out of wild dogs chasing them! Might make for faster time trials! Athens will probably look pretty good on the TV when the Olympics come but from what we have heard the city itself will be in disrepair - a freeway built from the airport to the city to serve the increased traffic expected during the Olympics was built with poor quality - surprise - The city has had to tear out the newly constructed freeway after it buckled in several places -. To date the new freeway has not been laid and it is unclear if it will be ready in time for the Olympic games. Remember rolling black outs in California - well it turns out that Athens was supposed to put in 5 new power stations to support the need for power during the Olympics. Of course Athens has not accomplished this yet so...they plan to have rolling blackouts in the city during the summer games as it is clear the power grid will be unable to handle the traffic.....

June is a sad time in Bonn as friends pack up and head home as their assignments end. There is a continual rotation of people, but it is always hard to say goodbye to friends. Lisa, the partner Dianne worked with left a couple of weeks ago and Dianne was very sad to see her go, as they had become the best of friends. Another co-worker, Patrick is set to head home in the coming weeks. Both will be sorely missed as they made our transition to Bonn as smooth as can be expected and made us feel welcome from the outset. I’m sure we will keep in touch with both Lisa and Patrick for years to come.

I’ve written enough for now, so it’s time to say goodbye once again. I thought I would throw in a newspaper article I came across a while ago. I’m always making fun of the German shopping experience and low and behold, the Wall Street Journal Europe runs an article of the peculiarities of this country’s obsession with discount, no frills or service, grocery shopping experience. I’m really not making this up!


Enjoy.

The Glynns


Tom, Dianne, Kira, Conner





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Bare-Bones
Shopping


Germany's discount retailers are among the world's most successful. Here's how one does it.


By ERIN WHITE and SUSANNA RAY
Staff Reporters of THE WALL STREET JOURNAL
May 10, 2004; Page R6

By some measures, Germany should be a discount retailer's nightmare. The highly regulated market prevents would-be budget trimmers from freely making some of the kinds of cost cuts taken for granted in the U.S. The country has strict rules regarding the hiring and firing of workers, and retailers generally can't sell "below cost." There are even laws about when stores can open and close.

Yet Germany has one of the most successful discount retail sectors in the world. In grocery retailing alone, discounters account for about 40% of the market, say Christian Schrahe and Frank Pietersen at KPMG in Germany. And behind this success lies a simple but intriguing strategy: To keep expenses low in a market with high labor costs, keep service to a minimum.

German discounters have learned that shoppers are more than willing to put up with bare-bones service and a no-frills environment when rock-bottom prices are their reward. German consumers are famously price-conscious, so the strategy has a natural home here. Its leading practitioner, the superlean supermarket chain Aldi, with some 4,000 stores in Germany, strips away nearly every bell and whistle that shoppers expect at a traditional grocery store. But Aldi has found the approach also works -- at least to some degree -- in other markets as well, having opened about 2,200 stores in 11 other countries, including the U.S., Britain and France, according to estimates.

"They're only doing what's necessary to keep the store open," says Bert Keizer, who follows retail at consultancy Capgemini in the Netherlands.


Aldi Facts

The first Aldi was started in 1948 in Essen, Germany, by the Albrecht family. Around the early 1960s, the retailer split into two companies, each run by a family brother, Aldi Nord Einkauf GmbH & Co., based in Essen, and Aldi Süd Einkauf GmbH & Co., based in Mülheim an der Ruhr, according to Rachael Aggarwal, international program manager at IGD, a U.K.-based food and grocery research firm. The privately owned companies are separate but follow the same principles, analysts say. Their combined revenue, including overseas operations, is estimated at 32 billion euros ($37.8 billion), according to Ms. Aggarwal. Aldi is famously tight-lipped. A spokeswoman for Aldi Nord confirmed the company origins and the family's ownership, but declined to answer other questions. Repeated calls to Aldi Süd's main number went unanswered.


The success of Aldi's approach was evident at a popular outlet on a busy corner in Frankfurt recently where shoppers in tailored suits and in workmen's overalls filled their carts side by side. Items for sale included a liter (about a quart) of orange juice for 59 European cents (70 U.S. cents), a bottle of red wine from France for 1.19 euro, a six-pack of pilsner beer for 1.79 euro and a box of 25 peppermint tea bags for 39 European cents. By comparison, the cheapest liter of orange juice at the Kaufhof grocery store in downtown Frankfurt was 1.49, and the cheapest box of 25 peppermint tea bags cost 79 European cents.


Aldi's strategy starts with hiring fewer store staff, analysts say. Its stores typically have about four or five workers per outlet, compared with about 15 at a normal supermarket, KPMG says. This way Aldi can pay good wages to its store clerks and still save on labor costs. KPMG says Aldi's labor costs are about 6% of revenue, compared with about 12% to 16% at a typical supermarket. Mr. Keizer says Aldi also avoids more costly "specialist" clerks, such as butchers or bakers. At Aldi, meat and bread typically come prepacked.


Aldi gets by with fewer workers partly because its stores are smaller: typically 750 square meters (8,100 square feet) of selling space, compared with about 1,000 square meters at a traditional supermarket, says KPMG. But even so, there is only so much that so few can do.


On a recent evening at a Frankfurt Aldi store, only two of the four checkout stands were open, with lines at least a dozen shoppers deep. Only two other employees were visible in the whole store, and they were focused on pulling out empty boxes or restacking full ones, with no attention paid to the lines forming behind them and little time to answer customers' questions.


Ready or Not


Once shoppers reached the cash register, they had to spring into action. German grocery stores don't employ baggers in general, but at Aldi stores their absence can have potentially messy consequences. There are conveyor belts for the products leading up to the price scanner and register, but at that point the counter ends. Hurried checkers in the Frankfurt store pushed items through at assembly-line speed, and if no shopping cart or bag was waiting to receive them, cartons of eggs would simply end up on the floor.


Ledges on the other side of the checkout stands were lined with carts and shoppers bagging and rearranging their goods to haul them home. The store had no parking, and the carts were outfitted with devices to lock the wheels if they were taken off the premises.


Aldi also doesn't waste time or money arranging products on shelves. Food gets stacked in its original packing boxes, with the tops ripped off, piled high either on top of pallets against the walls or on simple shelving units. Prices are plainly listed on paper signs attached to boards hung from the ceiling. Boxes of goods in the Frankfurt store, such as cornflakes and peppermint tea, were piled up in stacks as high as six feet.


There's no piped-in music or soft lighting to get one in the shopping mood. And while some thought is clearly given to arrangement -- drinks are generally stacked together, for example -- many items appear to just be piled wherever there's room. At the Frankfurt store, steam cleaners were being sold next to bottles of plum liqueur, raisins next to rice and sparkling wine next to stockings.


If You Don't See It...


The tiny store staff doesn't have to worry about keeping shelves consistently stocked because Aldi doesn't replenish its goods very often, says Mr. Keizer.


"They fill up their stores once or twice a week," he says. That means shoppers sometimes can't find what they want, but they don't seem to mind. Some even rearrange their schedules to hit Aldi at the best times. "In the evenings, they often run out of bread and vegetables," says Audrionis Lapeikis, a Frankfurt construction worker, "so we just try to shop a little earlier."


Another way Aldi keeps its displays simple is by offering a limited range of goods, analysts say. About 95% of Aldi's goods are private label, says Ms. Aggarwal of IGD. And it often stocks just one product type per category. A typical Aldi store carries about 700 to 1,200 different products, compared with as many as 20,000 for a typical supermarket, says KPMG. At a Frankfurt Aldi, for instance, shoppers who wanted fresh milk could get only whole milk.


Aldi also keeps its marketing costs in check by pursuing a simple, straightforward advertising strategy. In Germany it avoids expensive TV commercials and instead sticks with options like print ads, says KPMG. Since Aldi is already such a well-known retailer in Germany, its ads focus on simple product-oriented messages rather than fuzzier and potentially more expensive "brand-building" extravaganzas.


Christiane Beckort, a lab technician from Frankfurt who shops at her neighborhood Aldi once a week, says she remembers a time in her childhood when friends' parents refused to frequent the store because the food wasn't displayed in proper cabinets or shelves.


"They said picking out of boxes on the floor was for poor people," Ms. Beckort recalls. Today, she adds, "that stigma is long gone." --Ms. White is a staff reporter in The Wall Street Journal's London bureau and Ms. Ray is a reporter for Dow Jones Newswires in Frankfurt.


Write to Erin White at erin.white@wsj.com