Digital and sometimes without staff – shopping in the supermarket is in a state of upheaval. Many providers are working on new solutions. But in some places the expansion still faces legal limits.
Take a snack or a drink from the shelf, scan it at the terminal, pay using the app or debit card and go out – it’s quick and easy in the smart grocery store. The customers of the staffless mini-market “Teo” at Hanau main station also appreciate this.
On a working day, many people quickly stock up on the essentials before their trip or during their lunch break. A 19-year-old customer finds it particularly practical that the small markets that belong to the Tegut supermarket chain are open even when others are closed.
But following a decision by the Hessian Administrative Court (VGH), the doors of most Teo branches in the state now have to remain closed on Sundays – a “serious setback” for the company, which was previously one of the pioneers in the market for smart grocery stores.
There are a variety of different concepts of such “smart stores” across Germany. The walk-in format is widespread; these are supermarkets with often reduced retail space. Customers usually scan the products themselves and pay at self-service checkouts.
In other stores there is no checkout at all; the products are recorded by camera. Before making their first purchase, customers enter their payment details in an app and can simply pack up the products and leave the store (“Grab&Go”). The purchase is billed automatically and the invoice follows by email. Some stores are open 24 hours a day, seven days a week, some with staff, others without. Once a day, an employee checks on everything, restocks shelves and cleans the shop area.
Solution for the country, even for locations with high frequency
Stephan Rüschen, professor of food retail at the Baden-Württemberg Cooperative State University in Heilbronn, has been observing the young industry for years. According to him, there are around 200 stores and 60 operators across Germany. The largest are “Tante M” (56) and the Teo markets (39), which belong to the Tegut supermarket chain.
According to experts, the walk-in format is suitable for locations with high customer frequency such as airports or train stations. Queues there would decrease. “Many people don’t like queuing and therefore don’t enter stores. As a result, the sales potential of many stores is not exhausted,” says Kai Hudetz from the retail research institute IFH Cologne.
In rural areas, stores without staff made sense. On the one hand, there is a lack of easily accessible shopping opportunities there, and because of the low number of customers, shops with staff there are often not profitable. Sunday plays a special role as an additional sales day. “Sundays are very valued by customers. Sales are as high as two to three working days combined,” says Rüschen.
Tegut puts “Teo” expansion plans on hold
Tegut even reports that in some places Sundays account for almost three quarters of the total sales of the “Teo” markets. Under the new conditions, all locations would now have to be reassessed and their profitability critically questioned. In response to the VGH decision, the supermarket chain has temporarily stopped all expansion plans for mini-supermarkets. A spokesman explains that they first want to have the necessary legal certainty before planning any further.
The court had decided that the closure of the “Teo” shops on Sundays ordered by the city of Fulda was legal because they were sales outlets within the meaning of the Shop Opening Act. Since then, the branches in Hesse have had to close on Sundays – with the exception of two shops near the train station. Other branches in Bavaria and Baden-Württemberg are not affected.
The black-red government in Hesse now wants to find an exception so that small digital markets can open on all Sundays throughout Hesse. According to Steven Haarke, member of the management team at the German Trade Association, Mecklenburg-Western Pomerania was the first federal state to recently enact such a regulation in its new shop closing law.
Aunt M is also active in Baden-Württemberg and Bavaria and also in Rhineland-Palatinate. Unlike Tegut, the competitor is confident about expansion. “The demand is huge. We have inquiries from all parts of the country and want to expand. Our goal is 100 branches by the end of 2024,” says the provider.
Rewe is also getting involved with the smart supermarkets. There are four “Pick & Go” branches across Germany. These are normal Rewe stores in large cities with staff. Payment is made cashless and without a cash register. The “Nahkaufbox” also belongs to the Rewe Group – the staffless mini markets are found in rural regions. Rewe speaks of a test run for both formats.
Industry on the move
In addition to the walk-ins, there are also vending machines that are set up either individually or in shop sales rooms. Customers select the groceries they want on a screen, which can be automatically picked and removed from an output compartment. According to Rüschen, there are more than 300 such stores and more than 250 different operators nationwide. The real estate group Vonovia and the company Late Bird are testing a vending machine as a neighborhood shop in a Munich residential complex. The concept is known from agriculture – farmers use such machines to offer milk and eggs, for example.
Trading expert Rüschen expects more operators to enter the market before consolidation occurs. He doesn’t believe that the smart stores are displacing normal supermarkets. “Smart stores will establish themselves as a relevant niche.” From his point of view, the format with self-service checkout has better future prospects. This is simple, technically less complex and cost-intensive than the “Grab&Go” variant. However, the prerequisite for further distribution is that Sunday opening is possible. Otherwise the house of cards will collapse, says Rüschen.
Source: Stern
