Germany 'Rewe 2020' Progressing Well

Matthias Queck (Research Director)
30 May 2017

Rewe Group is making good progress in its endeavour to develop a future-proof supermarket concept, Lebensmittel Zeitung reports. Seven pilots have now been opened under the ‘Rewe 2020’ concept and the German retail group is now fine tuning the various features and elements. The stores are situated in a variety of locations, including city centres; residential areas of varying affluence; and near to the Swiss border. 

Going forward, the stores will be better tailored to their respective catchment areas. Depending on location, they may contain sushi bars, coffee bars, coffee roasteries, tobacco humidors and Deli am Markt bistro areas; in addition to the standard salad and deli bars; and meat, charcuterie, cheese and fish counters. 

A roll-out of the final concept is not expected before 2018, especially as learnings from Rewe’s regional divisions are also expected to feed into the results. Rewe has contracted Dutch shop fitters Claessens Erdmann and Swiss firm Schweitzer Project AG.

The domestic supermarket division is the most important contributor to sales for the international grocer. Abroad, Rewe Group’s supermarkets trade under the name Billa and are independently managed by the group's Austrian arm.

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Matthias Queck (Research Director)
Matthias Queck (Research Director)

Opinion Foreign Help

30 May 2017

Within a period of just ten years or so, the German supermarket sector is now amongst the top players in the world. The new Rewe and also Edeka stores don’t have to hide behind any competitor from the UK, the Netherlands, Switzerland, France or the US. This is an enormous achievement given that this has always been an uphill struggle against the seemingly overwhelming power of the vigorous discounters. 

Who has driven the supermarkets out of their vapidity and passivity? Interestingly, not the Germans. Apart from Markus Mosa, the Edeka CEO, there is actually no German-origin top manager who has proven to be capable of leading both a classic supermarket operation and a discount division. Rather, help has frequently come from abroad. It is the Frenchman Alain Caparros, who, when leaving Rewe Group this summer as its long-standing CEO, will hand over the reins to compatriot Lionel Souque. 

It’s also no coincidence that the shopfitters involved are Dutch and Swiss – two markets with dominant supermarket cultures, but still a discounter influence strong enough to be reflected in the concepts. This is a point of difference vs. the UK and US grocery markets where discounters have only just begun to penetrate the supermarket culture – with prospects of much more to come in the US following Lidl’s entry. It is also understood that Rewe Group’s Austrian Merkur supermarkets, as well as Billa, have inspired some of Rewe’s latest ideas – even if the intra-group co-operation between Austria and Germany seems to be dysfunctional sometimes. 

So while the German discounters are still busy penetrating Europe, from the Algarve to Lapland, to become the two leading players by 2020 – we refer here of course to Schwarz Group and Aldi – who will take the #1 and #2 positions according to LZ Retailytics data; it is then their European neighbours who are giving the Germans extra lessons in supermarket retail. There are enough German consumers who appreciate a new, inspiring shopping environment – they have seen such impressive stores on their various holidays abroad. Furthermore, they have more money than ever (on average); and they are fed up with price dumping for meat and milk as they have been trained by farmers and environmentalists that parsimony is evil. Super conditions for super markets.     

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