Convenience retailers like REWE Group in Germany are committed to a continuous quantitative and qualitative development of convenience retail propositions in response to the growing market opportunity, particularly among time poor and younger shoppers. This process of evolution has continued through the course of the global pandemic, helped no doubt by the relative efficiency of the German response building back consumer confidence.

REWE Group, the 2017 NACS Sustainability Retailer of the Year, has itself been meeting these developing consumer needs with its REWE To Go concept since 2011.

At the beginning of 2020, REWE Group had more than 550 convenience stores, most of which are located in high traffic locations such as Aral petrol stations, train stations, downtown pedestrian areas and airports. The concept is constantly being refined and adapted to market developments, demonstrating the increasing sophistication of retail capabilities to be found in the German market.

Christian Warning, the NACS representative for German-speaking markets, talked with the people behind the concept: Philipp Pauly, head of REWE Convenience Formats; Dr. Alexander König, head of Business Development, REWE Convenience Formats; and David Safar, head of Category Management, REWE Convenience Formats.

The REWE To Go concept has recently been relaunched. What are the most important developments and first experiences?

Pauly: The new generation of the REWE To Go concept focuses on highly frequented locations. It was first brought to life at the train station in the former capital of Germany, Bonn, in May 2019 in nearly 160 square meters of sales area. The store’s results have really exceeded our expectations in terms of revenue and customer traffic. The second store at Cologne Central Station has just been converted according to the further developed concept and learnings from the store in Bonn.

Before [COVID-19], up to 20% of customers used these self-checkouts, and currently around 50% of customers use them.

On the basis of the experience we have gained to date, we have focused even more strongly on customer wishes and needs. Customers want to satisfy their hunger and thirst in a fast, convenient and healthy way while on the move. All of this must take place in a pleasant, clearly structured environment and be uncomplicated. In order to bring all this together even better than before, we took a look at the store layout, design, product ranges, as well as the technology and processes.

What concrete changes have been made to the product ranges?

Safar: We have become even more modular in our product range, so that we can supply every location with the right assortment. At high-frequency travel locations, we focus on a broad and innovative “food for now” assortment, i.e. snacks for immediate consumption. This includes changing products in the categories bake-off, cold and hot counter like fresh burgers, wraps, soups, sandwiches, as well as cold and hot drinks. Due to their high frequency and wide customer spectrum, the two new stores are also very well suited for testing product innovations.

What was optimized in the design of the stores and the processes?

König: Every location is different. In our view, modular solutions are the key to success. The design of the store, processes and technology must be based on local conditions and consumer behavior.

At the two train stations with several thousand customers a day, we reserved space for many checkouts in the store design to enable fast shopping and make sure that customers catch their train. And you need the right technology. In Bonn, we were very successful with newly introduced self-checkouts. They reduce waiting times and were well received. In Cologne, we planned more self-checkouts from the very beginning. Before [COVID-19], up to 20% of customers used these self-checkouts, and currently around 50% of customers use them. Everything at these locations is designed for speed.

At other locations, however, such as those with many offices in the vicinity, we might create a spacious and inviting seating area because that’s where customers spend their lunch break.

Safar: It really is a complex interaction. Store design, integrated technology and product range must complement each other and fit the location and especially its customers. It’s really important to think from the customer’s point of view when planning a store. With this in mind, we plan the layout of the product ranges. For example, where products are placed for direct consumption or how to create a “fast in-out” zone for quick purchases.

We also offer customers the choice of different convenience levels for food and beverages. For example, they can get a snack or coffee from the staff but also use takeaway shelves with fresh or baked goods or pull their coffee from machines on their own.

It is also important to draw customers’ attention to the offers, especially the warm meals, which vary depending on the time of day. We use digital signage to present our offers exactly on time of day and week.

Which locations do you want to focus on with the fine-tuned format, and what are your next projects?

König: The most important location criterion is frequency. REWE To Go is a format for areas of up to 300 square meters in high-frequency locations. In addition to train stations, these are also airport locations if we return to some form of normality in a period after [COVID-19]. We opened our first airport store at the airport in Nuremberg in November 2019.

How do you think the expansion of convenience stores in Germany will continue in general?

König: Compared to other countries, the convenience trend in Germany is still in its early stages. The German market is very special and challenging. Successful players from abroad have tried to gain a foothold here but found it difficult. However, there are many indications that a future market is developing here. For example, we can see that the customers at REWE To Go are on average younger than in our supermarkets.

At high-frequency travel locations, we focus on a broad and innovative ‘food for now’ assortment, i.e. snacks for immediate consumption.

We would like to take advantage of those opportunities. That is why we strategically positioned ourselves with our concept several years ago to be able to serve the growing trend toward out-of-home consumption. However, the competition is picking up. Even supermarkets and discounters are increasingly focusing on convenience. Starting with convenience assortments and shelf placement, right through to the choice of high-frequency locations.

Pauly:We are currently experiencing a continuous quantitative and qualitative development of the many formats that already exist today. From the kiosk around the corner, to the gas station and the airport store, I can already see many great approaches, whether it’s product ranges, concepts, layouts or technology solutions. All market participants, whether established or newcomers, are reacting to the increasing convenience sector. We want to remain a driving force in this.

About REWE To Go and Lekkerland

Since 2020 Lekkerland has been part of REWE Group, one of the leading trading and tourism groups in Germany and Europe. In 2019, REWE Group achieved a total external turnover of around 63 billion euros (US$75 billion). REWE Group, founded in 1927, is present in 24 European countries with more than 360,000 employees.

Lekkerland is a specialist for on-the-go consumption and offers innovative services, tailor-made logistics and a broadly based wholesale product range in five European countries. Its customers include service stations, kiosks, convenience stores, bakeries, food retailers and quick service restaurants. In 2019, Lekkerland serviced around 85,500 sales points throughout Europe and employed around 5,000 people.

REWE To Go within the REWE Convenience Formats team is now part of Lekkerland and the new business area.

This article was reprinted with permission from Global C-Store Focus, the monthly newsletter from U.K.-based Insight; www.insightresearch.co.uk.