Globus Fridel Not Yet Ripe For Roll-Out

Matthias Queck (Research Director)
25 April 2017
Hypermarket operator Globus has stepped on the brakes in developing its small store Fridel concept. As reported by Lebensmittel Zeitung, the pilot store, which was opened two years ago in Saarbrücken, has not yet proven convincing enough to justify a roll-out.

Processes are not yet ready to be multiplied, and reportedly it is the cost structure of the instore restaurant that is causing headaches for management. Additionally, following the recent closure of the last remaining Globus Drive click & collect station, it will no longer be possible to order goods online and have them delivered to the store.

The store is situated on 800 square metres and was originally designed to combine a 350 square metre restaurant with a click & collect station and a 450 square metre upscale food store offering 3,000 products, including 1,000 organic items. Going forward, Globus now aims to work on a “holistic and sustainable multichannel strategy”.
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Matthias Queck (Research Director)
Matthias Queck (Research Director)

Opinion Too Much For The Market

25 April 2017
“A small supermarket with large restaurant and drive-in – that’s unique”, Globus boss Johannes Scupin said at the opening two years ago. And it seems it will stay unique, for now. This does not have to be Globus’s fault. Globus has recently discovered the hard way that not everything that is a good idea finds enough followers – the last such venture was the Globus Drive concept. Now it is the clever combination of food shopping and hospitality.

Globus may be spoiled by the fact that as its main business, it successfully operates a store format that is generally a no-go in the German retail scene – large hypermarkets. But this doesn’t mean it can do anything: A world-class golfer cannot expect to switch to minigolf with the same success just because small has become beautiful.

In the case of combining a restaurant with an upscale grocery store, it may just be too early for the market, and too much in one store. Much bigger companies have failed – Rewe Group’s restaurant concepts Made by Rewe, Oh Angie and Temma have also been discontinued or seen no roll-out yet.

But there are also a few inbuilt – unnecessary – flaws to the concept.  The brand offer is extremely limited – not even Nutella is offered, as this was expected to be ordered online by those interested. Not even Aldi has managed to do without Nutella, so why would Fridel? (By the way, Aldi and Lidl have stores directly opposite the Fridel market.) The restaurant menu is very broad-ranging. It includes Asian, American, Italian and German cuisine, namely burgers, pizzas, schnitzels, salads, barbecue, wok meals and breakfast. No wonder this creates challenges on the cost side.

Fridel was set to be trialled in the Czech Republic as well. Globus should not stop that foreign test because of the experience in Germany: When avoiding the inbuilt deficits the concept might run well. In Germany, however, Globus might have to understand that the market is simply not yet ready for such a sophisticated, unknown concept.
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