Final Call for German E-Grocery - Grocery Insights 2022 - Accenture
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Grocery Insights 2022 Final Call for German E-Grocery
Contents 1 Executive Summary 5 2 Key Trends 6 • Booming home delivery fueled by need for convenience 6 • Expanding assortments driven by individualization of needs 8 • Experience-focused retail creating a sense of belonging 10 • Consumer behavior changes due to the pandemic shock 11 3 Elements of Change: German Grocery Retail 2017-2021 14 • Before the pandemic 15 • Pandemic impact 15 • Differentiated shopping behaviors of family lifestyle groups 16 • Shopping missions affect the choice of formats 19 • German e-grocery retailing’s rapid ascent 20 • Consumers shop with brands directly 21 4 Outlook 2030 24 • Three scenarios for future growth of grocery e-com 24 • Demographics driving grocery e-com growth 26 • Implications for brick-and-mortar incumbents 26 • German grocery market projections including e-com 28 2 Accenture & GfK – Grocery Insights 2022
5 Conclusions for German Grocery Retailers 32
• Differentiation of brick-and-mortar offerings 32
• Unleashing omnichannel potential 35
• Could aggregators be the white knights? 37
• Thinking beyond 2030 38
• Q-com: Are gorillas already a threatened species? 39
6 Capability Priorities for Retailers 44
• Forecasting for differentiated demand in granular networks 44
• Grocery pricing considering consumer segments 46
• Analytics-driven assortment optimization 49
• Grocery retailers’ central role for sustainability 51
• Flexible and scalable in-store technology 54
• Consumer-centric last mile fulfilment 56
• Monetization of customer insights through retail media 58
Accenture & GfK – Grocery Insights 2022 34 Accenture & GfK – Grocery Insights 2022
Executive
Summary
The German food retail industry has experienced unprecedented
disruption in the last few years. The industry has had to deal with
substantially changed shopping behaviors due to the COVID-19
pandemic, which gave rise to previously unknown phenomena from
hoarding to contactless delivery. This provided an ideal breeding ground
for new and not-so-new players such as Picnic, Getir and Gorillas who
flourished with their on-demand, (rapid) home delivery offers. And while
additional disruptions such as grounded vessels in the Suez Channel,
continued inflation or global political conflicts are difficult to predict,
one thing is certain: e-commerce and digital services in food retailing
will continue to pose a serious threat to traditional sales channels and
players.
This study by Accenture and GfK looks at current consumer trends as
well as market developments and examines the ingredients of
successful e-grocery offerings. We outline key scenarios for the German
food retail industry in 2030 and provide retailers with specific insights
to accelerate their transformation and secure one of the scarce spots
as a major e-grocery player in Germany 2030.
Despite lagging behind other European countries such as the UK and
France thus far, e-grocery is set to come to the forefront of German food
retailing in the period up to 2030. Our projections indicate a grocery
e-com & omnichannel share of up to 17% of the total market which
substantially limits the leeway for pure brick-and-mortar offerings.
Still, established grocery retailers do have a chance to participate in the
omnichannel part of the industry and thereby counterbalance downturn
in brick-and-mortar market share.
However, most of the major brick-and-mortar players in Germany
currently do not have comprehensive e-grocery offerings ready to scale.
This makes the industry vulnerable to disruption from pure plays like
Picnic or Ocado, often backed by venture capital, or from retail giants
like Amazon or JD.com who have deep enough pockets to promptly
create and scale new business models. It would be a costly mistake for
established grocery retailers to let new competitors enjoy an early-
mover advantage on top. The window of opportunity to gain a significant
share of the German E-grocery market is closing fast.
Accenture & GfK – Grocery Insights 2022 5Key Trends
2
Key Trends
To predict how the German grocery retailing paper and shampoo. Once placed, the order is
landscape might look in 2030, it’s important to usually delivered the next day, with Picnic’s one-
understand the current state. To gain deeper hour delivery windows – which are shortened to
insights into recent developments and particularly 20 – 30 minutes on the delivery day – setting it apart
current consumer needs and expectations, we from competitors (with longer, often half-day,
examine key trends gaining traction with today's delivery windows). For the last-mile delivery Picnic
grocery shoppers. has its own eco-friendly fleet of 2.000 electric
vehicles that operate in 45 cities in North Rhine-
Booming home delivery fueled Westphalia (NRW) with new locations being added
by need for convenience almost monthly.
Food shopping is an essential part of our everyday Picnic just celebrated its seventh birthday, and it
life: we fill the shopping cart, carefully select the looks like the new kid on the block is here to stay,
nicest produce, wait in line to pay and then carry or with revenues in the EU growing by almost 100%
drive the overloaded bags home all by ourselves. to 455 million EUR in 2020.1 Although Picnic in
Or, at least, that was the way it worked until Germany has only operated in NRW so far, the
recently. New tech-savvy start-ups such as Picnic or number of customers has grown fourfold to more
Gorillas are entering the highly competitive German than 200.000 households within twelve months.
grocery market and aim to revolutionize the way
Germany buys groceries. In Germany, the major grocery market player EDEKA
announced an exclusive partnership with Picnic,
For example, the Dutch online supermarket Picnic, alongside taking a 20% stake in Picnic International2.
one of the fastest growing e-grocery startups in For Picnic’s founders, the next steps are clear: further
Europe, offers doorstep grocery delivery at expansion into Germany and entry into the French
competitive prices, with no shipping fees. Groceries market. To this end, the company has raised 600
are ordered exclusively through the Picnic app. million EUR from prominent investors including The
Customers can – at the touch of a button – select Bill & Melinda Gates Foundation and is now valued
from a wide range of products, from fruit and above 1 billion EUR2 (also see retailer spotlight on
vegetables, fresh meat and baked goods to toilet Picnic on page 22).
6 Accenture & GfK – Grocery Insights 2022Key Trends
Same, same but different: After the latest funding round, the valuation has
dark store and e-bikes risen further to 2,6 billion EUR. Recently, the
Striving towards the same goal of challenging the company reported annual sales of almost 190
traditional way of grocery shopping, the Berlin- million EUR4 and 4,5 million orders within six
based start-up Gorillas relies on a different type of months, while expanding operations from Germany
business model. Unlike Picnic, which targets the to seven other European countries and the US.3
traditional weekly shopping by offering a wide
assortment of over 10.000 items, Gorillas has set its Convenience orientation
focus primarily on spontaneous, smaller purchases driven by digitalization
through a more limited product assortment (2.500 From a strategic perspective, both start-ups have
items). As their "faster than you" slogan suggests, positioned themselves as making grocery shopping
the start-up promises to deliver groceries at as convenient as possible for the customer. In
supermarket prices within 10 minutes of ordering particular, by ordering via the Picnic or Gorillas app,
via the Gorillas app. There is no minimum order customers are not only able to save time but also to
value, but the retailer charges a modest delivery fee reduce physical and mental effort (e.g. getting to
of 1,80 EUR3 plus 2,10 EUR for orders below 15 EUR the stores, picking and carrying items etc.). The
(also see page 39 about q-com). ability to bring greater convenience to everyday
grocery shopping is how Picnic and Gorillas
To live up to this promise, Gorillas operates its own differentiate themselves from traditional grocery
"dark stores" in densely populated, high-demand retailers. For example, Gorillas states on its website
areas – effectively small warehouses where that “we have the technology to go to the moon,
products are stored, packed into orders and grocery shopping has to be radically faster and
handed to drivers. Typically, each dark store covers much more convenient!”, while Picnic highlights
one neighborhood, enabling easy access to their being the “delivery service that saves time and
customers and reduces both last-mile costs and respects their customers' time”.
delivery times. Once a customer orders via the
Gorillas app, pickers in the hub collect the items Digitalization has been key to consumers’ growing
which are then delivered by Gorillas’ so-called demand for convenience. With the Internet and
"riders". Further, to avoid any delivery delays due to smartphones, employees in numerous industries
traffic, riders use e-bikes instead of vans or trucks. now are always connected and reachable. With the
For an enhanced customer experience, shoppers traditional concept of nine-to-five office work largely
can track their rider in real-time to their front door. shifted to remote work models during COVID-19,
further blurring the spheres of work and private life,
Gorillas reached unicorn status with the same free time naturally became an even more scarce
speed at which it promises to deliver, with a 850 resource. The success of the abovementioned
million EUR valuation just nine months after launch. business models illustrates consumers’ inherent
Picnic Gorillas 1.000
710
600
455
350
190Key Trends
need for less complexity in everyday life. In today’s consumers, who are increasingly conscious of social
fast-paced world, more and more customers see and environmental issues and demanding action
completing basic everyday tasks as a drain on from retailers. Nearly one third of German
valuable time. In recent surveys, one in three consumers now expect food retailers to offer more
Germans felt pressed for time and, in response, sustainable grocery options, and most consumers
many are increasingly looking for services that make claim they would not hesitate to pay more for these.8
their everyday lives simpler and more efficient and
free up time for other activities.7 Retail sales (in million EUR) 69
Increased expectations towards grocery retailers
to make shopping easier and more efficient, as
indicated by a recent Accenture consumer survey,
49
therefore come as little surprise and grocery delivery
services, such as those provided by Picnic or Gorillas
appear ideally positioned to address this.8
Expanding assortments driven
by individualization of needs
14
You cannot walk into any hip coffee shop in Berlin
without seeing the iconic cartons of Oatly. Started
as a niche brand, Oatly has grown into a trendy milk 2 4
alternative available in more than 20 countries
globally. The products quickly entered the aisles of 2017 2018 2019 2020 2021
leading grocery retailers and are now also served
Figure 2: Growth trajectory of Oatly in Germany10
at Starbucks.
Founded in Sweden, Oatly is a vegan food
company. Its signature product is a 100% plant-
based milk alternative made from oats. By providing
consumers with plant-based milk substitutes, Oatly
positions itself as a company helping consumers
lead healthier and more sustainable lifestyles that
don’t deplete the planet's resources. With slightly
above-average characteristics of the values
'success' and 'integrity', the values 'hedonism' and
'closeness to nature' are of central importance for
Oatly consumers.9 More traditional values, on the
other hand, play a subordinate role with these
buyers.
With this sustainable, and purpose-driven brand
image, Oatly gained popularity amongst both
consumers and investors. As sales in Germany have
grown almost thirty-fold in the past four years the
company has reported rapid revenue growth
(Fig. 2).10 Milk substitutes are in vogue on the stock
market too: when Oatly went public last year, it was
valued at 8,5 billion EUR, which is typically only see
with tech companies’ IPOs.
Reinforced by movements like #FridaysForFuture,
sustainability has become a top priority for many
8 Accenture & GfK – Grocery Insights 2022Key Trends
The fact that more than three-quarter of German younger consumers, they too continue to push
consumers would switch to a grocery retailer who their way into grocery shelves − with significant
better understands and responds to their impact on incumbent brands. While annual sales
sustainability concerns shows that food retailers are of vision and purpose brands (incl. e.g. Oatly,
now no longer just competing on assortment, but followfish and Veganz) have recorded significant
"purpose".8 The success of examples like Oatly growth of ~28% on average, established consumer
illustrates that today's consumers are looking for brands in the same categories grew by only 3%.9
brands that match not only their individual These results underline the relevance of purpose
consumption and eating habits, but also their and vision brands for both consumers and retailers.
values.
Taking a step back enables this expanding
Brands like Oatly address today's highly assortment to be contextualized amongst
differentiated consumer needs within food the broader diversification in lifestyles and
retailing consumption that food retailers are having
With sustainability now a strategic differentiating to respond to. In the wake of the ongoing
factor for food retailers, assortments across individualization of today´s societies, consumers
numerous categories are being constantly are increasingly emancipated from traditional
extended to include sustainable alternatives. forms of life. The pursuit of individuality and self-
In response to increasing competition from determination has led to new lifestyles and to a
innovative vegan brands, established consumer pluralization of values and consumption patterns.
packaged goods giants like Nestlé and grocery There have never been more nutritional trends than
retailers like Rewe have recently launched their there are today − vegan, paleo or intolerance-related
own plant-based substitutes (e.g. Nestlé's "Garden diets being just a select few examples. Retailers are
Gourmet" range and Rewe's vegan own-label confronted with highly fragmented consumer
products). A search for "vegan" in Rewe's online demands, which they are having to mirror on the
store yields more than 1.100 results. shelves: while an average German supermarket in
the 1980s offered around 6.000 different products,
However, the expanding product range across today’s assortments run into the tens of thousands,
categories is not only fueled by sustainable brands, reflecting the heterogeneity of modern consumer
but also those that have integrated social purpose values and lifestyles.
into their business models (such as Viva con Aqua
and Share). Powered by their popularity amongst
Mindset
Brands with a commitment to
I want brands that do something
Message Vision sustainability that goes beyond the
good for our planet and society
Brands actual product e.g. own initiatives
I want brands that give me a Brands with a sustainable focus
good feeling for myself and Purpose brands combined with shoppers’
my environment lifestyle demands
d
an
Br
I want brands that have Functional brands that have an additional
an extra benefit for me Hybrid brands benefit for the shopper and/or an initial
(ego need) focus on sustainability
Mainly major traditional brands
I want brands that
Product Product brands with traditional strengths such
are suited to me
as quality and shopper trust
Product
Offer
features
Figure 3: GfK hierarchy of needs
Accenture & GfK – Grocery Insights 2022 9Key Trends
Experience-focused retail years. The retailer opened its first grocery store in
creating a sense of belonging Turin in 2007 and has since expanded to operate
about 30 stores across the world, serving a huge
In 2021, the Swiss retailer Migros launched a new fan base across cities like New York, Tokyo, Sydney,
store concept called BRIGDE. Located in the heart Paris and Munich. In a similar way, Edeka Zurheide
of Zurich, BRIGDE is a mix of supermarket, regional in Düsseldorf provides a unique in-store shopping
gastronomy offering, and event location, that’s experience by focusing on product quality and
been designed to create a unique culinary world service. The supermarket features a variety of food
and provide a new and compelling in-store worlds with special service counters. Each of them
experience aimed at food lovers. On 2.000+ square contains of its own in-store dining area (e.g.
meters, it offers fresh and seasonal products from premium beef bar).
local farmers, bistros and bars, as well as a "food-
lab’ hosting a variety of events and cooking classes The success of experience-based store concepts
where customers can learn more about food and illustrates consumer’s desire for social interaction.
the local food community. With the COVID-19 pandemic forcing professional
and private relationships from the physical to the
With the mantra “meet food, meet market, meet digital world, a great experience shopping at a
people”, the format positions itself as a passionate physical location has now become even more
ambassador of good food that connects people valuable to consumers. A recent survey shows that
with high-quality products. Its mission is to create a one in four consumers prefer shopping in-store to
place for the food community to meet with friends online so they can spend time with friends and
and share food-related experiences, with freshness, family.13 In a digitalized world, shopping is
regionality, and seasonality at the heart. To ensure a way to deepen relationships and friendships and
customers find a truly unique assortment, BRIDGE create a sense of belonging. Shopping for today's
partners with small and local food producers who consumers is therefore no longer just about buying
offer everything from healthy and homemade to something, but also about sharing experiences and
vegan products. By eliminating digital screens, the building and deepening relationships with others.
format focuses on physical, haptic experiences.
Nonetheless, the "instagrammable" interior provides Overall, whilst macro trends such as
customers a welcome opportunity to share in-store individualization, sustainability, and digitalization
experiences on social media. continue to dominate the German grocery retail
landscape, trends towards convenience- and
With a similar concept, the Italian food market experience-focused retail reveal the extent of
Eataly has grown in popularity over the last few evolving customer needs and expectations.
10 Accenture & GfK – Grocery Insights 2022Key Trends
Consumer behavior changes due to the pandemic shock
The COVID-19 pandemic has had a seismic effect on shopper behavior, both reinforcing some pre-existing trends
in the retail sector and triggering new ones: over 25% of consumers significantly changed their daily shopping
behavior in the first year of the pandemic.11 These changes can be directly attributed to five driving forces:
Balance Budgeteering Purpose Findability Fluidity
Social
Health & wellbeing: Budget decisions: responsibility: How you shop: Occasions you shop:
• Attention to • Attention to • Buying eco/ • Use of a shopping • Getting food &
mental/physical price, special animal friendly list, buying drinks in different
health/appearance offers, quality • Local products/ different products ways than before
• Healthy nutrition • Basket size socially equitable • Shopping • New needs because
and information • Added value, brands groceries/ special of working from home
• Moderating ‘bad’ premium and • Looking for products online • Shopping else-
products special benefits information/ • Shopping fast, where or at
inspiration use of technology different times
Figure 4: Shopper behavior drivers impacted by COVID-1911
Balance Budgeteering
The need to slow down and take control over the Another impact of the pandemic, which has only
past two years propelled new product categories been exacerbated by recent surging inflation, has
into the spotlight and intensified focus on wellness: seen consumers becoming more mindful of their
50% of shoppers paid extra attention to physical budgets when making household purchases.
health during the pandemic, 48% to mental Increased price sensitivity and consideration of
wellbeing and happiness and 41% to product labels price vs. quality now sees 66% checking the prices
and ingredients.11 Even as the pandemic recedes, of grocery products they intend to buy, 52%
mental and physical health, self-care and shopping in stores with the best promotions and
rejuvenation remain at the forefront of shoppers’ 43% actively trying to keep the cost of their
minds. shopping baskets low.11
As part of returning to (a new) normal, many want The years ahead will be marked by a need for
to continue taking greater care with their diet, for budget engineering, which means balancing
example, by reducing consumption of "unhealthy" budget, lifestyle demands and perceived quality.
foods. Closer attention to ingredients will therefore Willingness to purchase premium products may not
naturally increase, and the proliferation of the nutri- necessarily cease, but consumers are likely to be
score across brands (including grocery retailers’ increasingly selective as to how and where they
private labels) is proving a valuable, pertinent tool choose to splurge.
to assist consumers in this mission.
There are multiple examples of retailers who have
used e.g. color-guided price signing in store to
guide shopper to those items, that help to save
budget: Promotions are communicated in orange
and low prices or value for money in blue. See also
page 46 on pricing trends and capabilities in
Germany.
Accenture & GfK – Grocery Insights 2022 11Key Trends
Purpose Findability
Consumers have shifted towards more sustainable COVID-19 has significantly reduced the number of
purchasing, with both environmental and social touchpoints on the grocery shopping journey, as
purposes being key purchase drivers: 37% made a consumers have tried to spend as little time as
conscious effort to buy from brands that care possible in stores over the last two years. 49% of
about animal welfare, whilst 37% switched to locally shoppers mentioned that they tried to do their
produced items. More and more shoppers grocery shopping as quickly as possible during the
also want to reduce their carbon footprint.11 pandemic, with 27% making use of new technology
(such as self-scan) and 14% doing their main weekly
Consequently, the hierarchy of choice is less grocery shop online as a result.11
defined by price, and increasingly a reflection of
personal values. Shoppers look for brands and Making a shopping list and shopping at speed will
products that seamlessly meet their lifestyle persist, with the resulting reduction in dwell time
demands and do good. Purposeful purchasing – and willingness to be inspired in-store making
at the expense of functional purchasing – is here product "findability" a key to grocery retailers’
to stay. success. Increased use of new in-store technology
to this end will certainly influence the grocery
Purposeful purchasing is not limited to products; experience going forward.
grocery retailers also need to comply with this
concept in order to be successful. A key example To enable consumer inspiration outside the actual
would be trying to decrease food waste by shopping trip, some retailers are also coming up
participating in initiatives like "Too Good To Go", with innovative solutions such as recipe apps,
which aims to let customers rescue unsold or where all the ingredients needed to make a dish
surplus food from shops and restaurants via a can be added to the shopping list at once or
smartphone app. Clearly communicated efforts bought with one click directly via the app.
to reduce plastic packaging or minimize carbon
emissions by purchasing from local producers is
further evidence of the growing importance of
this trend in German grocery retail. Fluidity
See also page 51 on retailers’ role and options in During the pandemic, home became the office,
creating a sustainability narrative. school, store, restaurant and holiday destination –
all at once. This fluid living situation created new
scenarios and demanded flexible solutions. In
2020, 29% of consumers shopped at different
times of day than they had previously and 16%
shopped at different stores.11 As a result, besides
omnichannel retailers or online pure plays for
whom addressing the impact of "fluidity" is
ingrained in their offering, some retailers piloted
autonomous micro stores or even driving kiosks to
allow 24/7 shopping near consumers’ homes and
or offices.
However, as we return to normality and highly
disruptive lockdown periods become a more
distant memory, related behavioral changes and
novel solutions to address them will arguably abate
to a degree.
12 Accenture & GfK – Grocery Insights 2022Key Trends Accenture & GfK – Grocery Insights 2022 13
Elements of Change: German Grocery Retail 2017 – 2021
3
Elements of Change:
German Grocery
Retail 2017 – 2021
Food retailing has largely been the standout winner (+3 pp.) and e-commerce (+1 pp.), with the latter’s
of the COVID-19 crisis. In 2021, sales grew to more growth most pronounced since the onset of the
than 168 billion EUR (inflation-adjusted), with total COVID-19 pandemic. With 3% market share, grocery
revenue split among six key store formats. e-com is still a relative niche at a time when almost
Discounters (e.g. Lidl, Aldi) and supermarkets (e.g. 12% of total retail revenues across all product
Edeka, Rewe) represent the most relevant store groups in Germany are generated online. Discounter
formats for German consumers, accounting for and drugstores could mainly retain their market
more than 64% of the market between them (35% share from 2015 to 2021.
and 29% respectively). Specialists (e.g. bakeries,
organic supermarkets), hypermarkets (e.g. Whilst there is no doubt that COVID-19 has led to a
Kaufland, real) and drugstores chains (e.g. dm, rapid and fundamental shift in consumer behavior,
Rossmann) then account for 15%, 12% and 6%, grocery retailing was already embarking on a
respectively, while e-commerce (e.g. Rewe Online, dynamic evolution before the pandemic started.
Picnic, Amazon) currently only makes up 3% of With digitalization and fierce competition, further
total sales. intensified by new entrants like Amazon, having
already impacted consumer behavior well before
However, the distribution of revenue across the the pandemic, it is worth briefly reviewing these
different store formats has certainly changed over previous developments in German grocery
time. As illustrated by Figure 5, hypermarkets and retailing.
specialists have lost market share to supermarkets
14 Accenture & GfK – Grocery Insights 2022 | Data Source: GfK Consumer Panel FMCGElements of Change: German Grocery Retail 2017 – 2021
Before the pandemic reflected in significantly higher spending per
household and more "one-stop" grocery shopping,
As illustrated by Figure 5, before COVID-19, the which benefited supermarket formats in particular.
grocery market was growing steadily, but slowly
(~0,5% per year between 2017 and 2019). 2020 – 2021: The new normal?
Discounters and supermarkets were the most Arguably, though, the true winner of the pandemic
popular store formats and managed to marginally was the e-commerce sector with a staggering 76%
increase their market share at the expense of sales increase from 2019 to 2021, in a grocery market
specialists (-2 pp.) and hypermarkets (-0,3 pp.) as growing by 13% in total. This huge growth was
consumers looked either for better prices or a initially driven by lockdown restrictions and curfews.
broader range of fresh and quality products. However, even after restrictions were gradually
Drugstore chains sustained their market share. eased, the sector continued to gain further market
share (+0,5 pp.) between 2020 and 2021.
Pandemic impact
This continued increase clearly shows that
2019 – 2020: Pandemic Onset customers have embraced the e-commerce format
With the onset of the pandemic in early 2020, a and are integrating it more and more into their
significant shift in food purchasing took place. Due everyday lives even as the pandemic recedes.
to the temporary closure of food outlets such as Other formats which had already lost market share
restaurants and workplace/university canteens, between 2019 and 2020 continued this negative
consumers increasingly took care of their own trajectory between 2020 and 2021. For example
meals. Shoppers stated that cooking at home hypermarkets lost market share over these two
gains importance and in 2021 65% of respondents years, illustrating that the pandemic amplified pre-
cooked hot meals at home every day (+3pp. versus existing challenges faced by brick-and-mortar
2019). The adaption to this new situation was retail.
180
3%
3%
6% E-Commerce
160
2% 6%
2% 2% Drugstore Chains
6% 13 %
6% 6%
140 12 %
13 % 13 % Hypermarkets
13 %
120 15 %
15 %
17 % 16 % 15 % Specialists
100
28 % 29 %
80
26 % 27 % 27 %
60 Supermarkets
40
36 % 37 % 36 % 35 % 35 %
20
0 Discounter
2017 2018 2019 2020 2021
Figure 5: Development of market share by store format (in billion EUR)
(values do not always add to 100% due to rounding)
Data Source: GfK Consumer Panel FMCG | Accenture & GfK – Grocery Insights 2022 15Elements of Change: German Grocery Retail 2017 – 2021
Differentiated shopping behaviors preferences (based on financial situation and
of family lifestyle groups life stage):
To gain deeper insights into recent developments While younger demographics such as "students/
in the German food retail market, it’s worth looking apprentices" and "social climbers/singles/DINKs"
at specific consumer segments more closely. By (Double Income No Kids) have shown a clear
distinguishing between household types ("family preference for supermarkets in recent years, "older
lifestyle groups") based on socioeconomic factors families" are more likely to opt for specialty retailers.
(i.e. age, number of children, net household Supermarkets only constituted 28% of their annual
income, job situation, household size) differences in food expenditure and 25% of their shopping trips in
store format preferences and spending 2021, compared to 38% and 33% respectively
development become apparent. amongst the "students/apprentices" group.
GfK Family Lifestly Groups
In education Employed Retired
Young Families Older Families Empty Nest Families Retired Families
Age: >39
Age: 49 Household Size: 2 Age: >49
Household Size: >1 Household Size: >1 No children Household Size: 1-n
Students/Apprentices Social Climbers/ Working Single Senior Singles
(with own Household) Singles/ DINKS People
Age: 39 Age: >59
Age:Elements of Change: German Grocery Retail 2017 – 2021
Average spend per household
Average spend per household development 2017–2019
development 2019–2021
Students / Apprentices
-5% 19%
(own household)
Working single people 1% 10%
Social climbers /
-7% 13%
(Young) singles / DINKS
Unemployed / working poor -6% 13%
Retired families -2% 8%
Young families -3% 10%
Empty nest families -2% 9%
Older families -3% 8%
Older singles 1% 8%
Total market -3% 9%
-10% -5% 0% 5% 10% 0% 5% 10% 15% 20% 25%
Figure 7: Grocery spend per household and lifestyle group (adjusted for inflation)
Data Source: GfK Consumer Panel FMCG | Accenture & GfK – Grocery Insights 2022 17Elements of Change: German Grocery Retail 2017 – 2021
Older Singles Older Families Empty Nest Families
100% 2% 4% 1% 2% 2% 4%
9% 9% 14 % 13 % 14 % 13 %
80%
27 %
29 % 25 % 28 % 26 % 28 %
60%
20 % 17 % 15 %
13 % 20 % 18 %
40% 5%
5% 5% 5%
5% 5%
20% 37 % 36 % 40 % 37 % 33 % 32 %
0%
2017 2021 2017 2021 2017 2021
Young Families Retired Families Unemployed/ Working Poor
100% 2% 3% 2% 2% 3% 5%
16 % 14 % 12 % 12 % 11 % 12 %
80%
26 % 24 %
24 % 29 % 28 % 25 %
60%
10 %
10 % 9%
9% 23 % 7%
22 % 7%
40% 10 % 9%
4% 4%
45 % 43 %
20% 38 % 36 % 33 % 32 %
0%
2017 2021 2017 2021 2017 2021
Social Climbers
Singles / DINKS Working Single People Students / Apprentices
100% 3% 5% 3% 5% 1% 2%
11 % 12 % 10 %
15 % 12 % 11 %
80%
28 % 32 % 38 %
30 %
31 % 36 %
60%
16 % 8%
14 % 7%
13 % 10 % 8%
40% 6% 6% 8%
8% 7%
20% 37 % 35 % 38 % 35 %
30 % 30 %
0%
2017 2021 2017 2021 2017 2021
Discounter Drugstore Chains Specialists Supermarkets Hypermarkets E-Commerce
Figure 8: Breakdown of annual spending per lifestyle group across retail formats
18 Accenture & GfK – Grocery Insights 2022 | Data Source: GfK Consumer Panel FMCGElements of Change: German Grocery Retail 2017 – 2021
Shopping missions affect the of different family lifestyle groups – which in all
choice of formats likelihood will become more pronounced with time.
Customers pursue different goals or "missions" The pandemic not only had an impact on
when shopping at food retailers: a supermarket consumers' overall spending and preferred
may be offering their favorite product at a reduced shopping locations, but also influenced spending
price ("cherry pick"), their coffee supply may be per shopping mission. Bulk purchasing in particular
running low just before a busy week or the has gained in importance for all lifestyle groups,
refrigerator might be completely empty ("routine with smaller purchases naturally decreasing
stock-up/bulk purchased"). simultaneously. This trend, particularly when
considered alongside the slight decrease in the
Across all lifestyle groups, bulk and routine average number of retailers visited by consumer
purchases accounted for the greatest proportion of (particularly between 2020 and 2021), suggests
total spending per average household between that one-stop shopping continues to be of high
2017 and 2019. The consistent growth in spending importance. It remains to be seen whether this will
on bulk purchases, connected to a decline in continue as the pandemic recedes.
shopping trips across store formats, highlights the
increasing popularity of one-stop shopping.
Consumers want to be able to do their shopping
easily and conveniently; ideally in one go.
Nevertheless, clear differences between lifestyle
groups can be observed. "Older families" and
"young families" spent 46 − 52% of their annual
expenditure on bulk purchases. By contrast, this
proportion is much lower (around 23 − 27%) for
single households, such as the "senior singles"
group. Broken down by shopping mission, routine
purchases account for the largest share of annual
spending in the "senior singles" group (24-25%).
Overall, historic developments and data trends
show significant variation in consumption behavior
1%
6%
Bulk purchase
11 %
Routine Stock up
45 %
Unusual Stock up
13 % Fresh Food Purchase
Small Purchase
Cherry Pick
23 %
2021
Figure 9: Spending share per shopping mission (excl. sales by specialists and e-commerce. Values do
not add to 100% due to rounding)
Data Source: GfK Consumer Panel FMCG | Accenture & GfK – Grocery Insights 2022 19Elements of Change: German Grocery Retail 2017 – 2021
German e-grocery There are clear differences in terms of e-grocery
retailing’s rapid ascent spending and channel adoption between lifestyle
groups.The group of "Older Singles" showed the
In an increasingly fast-moving world, in which time most significant e-grocery expenditure growth as a
is an ever rarer commodity, making everyday tasks proportion of total annual spend of 54%, partly
and activities as efficient, convenient and time- because of the low baseline. Unlike younger
saving as possible is crucial. While it used to be demographics "Older Singles" have discovered
difficult to imagine buying groceries especially e-grocery more recently and are therefore
fresh produce online, there are now numerous, exhibiting a "catch-up" effect.
e-grocery formats serving a variety of customer
needs and shopping missions. Further insights can be gained by looking
separately at e-com share of total annual spending
Data suggests that providers are targeting specific by each family lifestyle group. The figures reveal
shopping missions, which are now also being that "social climbers, (young) singles/DINKS" spent
pursued online. Consumers are shopping online at the highest percentage of annual expenditure on
pure supermarkets like Picnic that offer a full range online groceries amongst all groups. This is in line
of products for the weekly shop, while quick with the current positioning of food delivery as a
commerce players like Gorillas serve smaller, more premium service.
urgent customer demands with instant delivery, as
well as category specialists like Flaschenpost. In contrast older demographics, such as "older
families" and "retired families" spent the lowest
However, some traditional food retail chains have proportion of annual food spend on e-com (below
also tailored their offering to new consumer habits: 1% for "retired" families). E-grocery marks a
Already since 2011, Rewe offers customers the significant shift in and takes some getting used to,
option of home delivery: however, success is especially for older consumers accustomed to
certainly not a given, as can be seen from other traditional brick-and-mortar commerce.
examples such as Kaufland or Metro/GetNow who
discontinued their delivery services after only a Whilst a gradual increase in the popularity of
relatively short period of time. Nevertheless, the e-grocery formats was already evident across all
development of customer preferences on family lifestyle groups between 2017 and 2019, the
e-grocery in recent years suggests that now is the outbreak of the COVID-19 pandemic was a key
time to give e-Commerce a serious attempt. accelerator to adoption and appreciation amongst
German consumers (75% e-com sales growth).
Within a five-year period (2017 – 2021) the online
grocery sector has recorded significant sales
growth of almost 105%, compared to 30% and 10%,
respectively for supermarkets and discount stores.
E-Grocery in Germany
Clicks & Bricks Pure Players
Omnichannel Pure Supermarkets Quick Commerce Delivery Specialists Category Specialists
REWE PICNIC
FLINK BRINGOO BOFROST
NETTO BRINGMEISTER
GORILLAS BRINGMANN HELLO FRESH
DM MYTIME
GETIR WOLT FLASCHENPOST
ROSSMANN KNUSPR
Figure 10: GfK house of e-grocery with exemplary players
20 Accenture & GfK – Grocery Insights 2022 | Data Source: GfK Consumer Panel FMCGElements of Change: German Grocery Retail 2017 – 2021
Consumers shop with A well-known brand to jump on this trend was
brands directly PepsiCo, who launched two US D2C offerings,
pantryshop.com and snacks.com, in May 2020,
Direct-to-consumer (D2C) commerce is another where customers can easily and conveniently order
trend that has emerged in recent years and everything from classic single products to bundles
represents a potential disruption to retail business containing PepsiCo's bestselling and most popular
models. In contrast to traditional grocery retailing, products. The bundles were carefully curated
where the retailer acts as an intermediary between based on affinity research and designed to cater to
FMCG brands and consumer, D2C commerce consumers' 'new normal' such as working and
involves the manufacturer selling directly to the exercising from home and homeschooling during
consumers, primarily via online channels. the COVID-19 pandemic. They are easily accessible
Consumers appreciate this new format as it tends through a seamless, mobile-optimized ordering
to offer a more seamless, convenient, and experience: with just a couple of clicks, shoppers
personalized end-to-end experience. Dr. Oetker, can check out with free standard shipping.
Gilette and Lindt can be considered examples of However, these D2C offerings offer obvious
this approach. advantages for PepsiCo as well: fulfilling the
significant boost in demand caused by the
In a 2021 survey, 62% of US consumers reported pandemic (at a higher margin), greater control of
that they had already purchased directly from a the consumer relationship and brand messaging,
brand, with an impressive 88% satisfaction rating and direct access to meaningful consumer insights
mainly due to convenience and value.24 Consumers e.g. consumption patterns, preferences etc.
in Germany are also very receptive to D2C brand
purchases: 53% of respondents are considering
using D2C services in the future.12
Today’s consumers want to
do their shopping quickly
and conveniently and expect
a seamless experience
between online and in-store.
Now, the time has come for
traditional grocery retailers
to connect the dots and
holistically re-organize
existing operations to boost
omnichannel capabilities.
Data Source: GfK Consumer Panel FMCG | Accenture & GfK – Grocery Insights 2022 21Retailer Spotlight: Picnic, the modern milkman 22 Accenture & GfK – Grocery Insights 2022
Customer Proposition For maximum efficiency, Picnic has developed
proprietary software and hardware for supply
Picnic, founded 2015 in the Netherlands, is, as of chain operations: the delivery vans (designed
early 2022, only active in North-Rhine in-house) are electric, have narrower bodies to
Westphalia. The company offers a full range of allow double-parking and can fit up to 18 order
groceries (including fresh and ultra-fresh) for boxes per temperature zone. Orders, picked
home delivery. For the last mile, Picnic relies on from highly automated fulfilment centers, are
both its own fleet and, to provide customers with collected in cages which fit exactly into Picnic's
free delivery on orders over 35 euros, utilizes a proprietary delivery vans. The cages are
"milk run" fulfilment model where delivery vans transported by truck to distribution hubs close to
run on highly optimized fixed routes. This the city, which operate as cross-docking
enables high drop density and each customer to locations for serving nearby customers. Regional
be allocated a 20 – 30 minutes delivery window expansion is based on customer waiting lists to
(on the day of delivery). Orders can only be ensure new routes are profitable from day one.
placed via a smartphone app (there is no web
store or physical locations). If customers order The Transport Management System, developed
by 10pm, they can receive their purchases the in-house, optimizes route optimization planning
next day (and opt for a guaranteed morning using data analytics, AI and a range of highly
delivery if they order before 1pm). relevant parameters (e.g. accessibility, daylight,
driver experience). Furthermore, Big data
In Germany, Picnic collaborates with Edeka analytics is used to enable "just-in-time" supplier
Rhein-Ruhr (who holds a substantial stake in ordering, prevent food waste and forecast
Picnic) for "just-in-time" product supply. The customer delivery time.
assortment is broad, but intentionally more
limited than a typical German supermarket. In
addition to branded products, Picnic carries
own-label products of its wholesale partner to
cover a variety of price points. For some Outlook
categories, Picnic created its first own-label
products, which it intends to expand in due In The Netherlands, Picnic currently has an
course. e-grocery market share of more than 25%, even
though two large supermarket chains in the
Netherlands have their own large scale
e-commerce offerings (with a combined e-food
market share of over 60%15). In Germany, Picnic’s
Innovations ultimate goal is to offer its services nationwide.
In order to do so, the company recently secured
The Picnic customer journey, whilst intended to capital from The Bill & Melinda Gates Foundation
also provide some inspiration, is highly efficient (amongst others), which will be invested in
for consumers. The 10.000 SKU range gives robotized fulfillment centers, electric vehicles
customers sufficient choice but also allows them and in-house software development enable "just-
to create a 30-item basket in about 3 minutes. in-time’ supplier ordering, prevent food waste
Recommendations for repetitive items and forecast customer delivery time.2
accelerate the process for regular customers, for
which additional, curated product suggestions
make the assortment more relevant and
dynamic. Picnic combines an EDLP (every-day-
low-price) strategy with localized pricing.14
Accenture & GfK – Grocery Insights 2022 23Outlook 2030
4
Outlook 2030
Three scenarios for future gradual adoption amongst traditionally technology-
growth of grocery e-Com skeptical German consumers.
There is no doubt that the next decade will be Based on our modelling of the German food
dominated by the shift to e-commerce and retailing market, three major e-grocery scenarios
omnichannel grocery. The key question will be are most likely for 2030 depending on
how fast and how pervasive this shift turns out. demographic development, venture capital
The pandemic-induced desire to reduce physical investment, and future political, economic, and
contact by buying as much as possible online health-related developments.
supercharged what had been years of relatively
20%
17%
15%
12%
10%
8%
5%
0%
2017 2021 2030
Scenario 1 Scenario 2 Scenario 3
Figure 11: Projected e-grocery shares of the total german grocery market (based on 2017-2021 actuals10
and forecasted demographic development16)
24 Accenture & GfK – Grocery Insights 2022Scenario 3: A new
player enters the field
and captures an
additional 5% market
share by 2030
There is another threat to the
traditional German food retail
sector, accounted for in this
third scenario: a new competitor
could enter the German market
with an omnichannel-focused
brick-and-mortar network and a
Scenario 2: Growth comprehensive e-grocery
accelerating to 12% offering including subscription
e-com share services. Opening stores of
3.000 m² in German cities of
The "catch-up" effect exhibited 80.000 inhabitants or more
by the German e-grocery market could be enough to capture a
over last 3 years gives reason market share of roughly 5%.
to suggest that UK - German Such a venture would need to
market maturity gap could be be rooted in excellent analytical
bridged partially. This scenario capabilities to identify the most
assumes a consumer-based profitable locations. Space
Scenario 1: Moderate market maturity gap productivity comparable to the
growth to 8% e-com of 5 years and continued top 30% of current brick-and-
share e-commerce growth in the low mortar formats would be
double digits (to account for the realistic if the latest technology
Even the most conservative more dispersed populations in enabling fully data-driven
grocery executives and experts rural Germany which pose an optimization were utilized. To
do not expect e-com to return obvious limitation). A market reach this market share
to pre-pandemic market share share of around 12% would be projection, click-and-collect
and growth rate, with the expected by 2030. orders would need to generate
channel’s trajectory in other an equivalent volume of sales as
European markets such as This scenario requires serious the physical locations of the new
France and the UK foreshadowing e-grocery market entry by entrant by 2030.
its potential in Germany. established brick-and-mortar
retailers, the expansion of Few players have the necessary
Assuming a 10-year maturity gap business models from financial strength and capabilities
between the UK and German neighboring markets such as the to undertake such a venture.
markets, and after factoring in Netherlands or the UK and/or a However, the entry of Amazon
lower urban density in Germany, successful new pure play retailer Fresh into the US and UK markets
an online grocery market share backed by significant venture shows that Amazon is one such
of approximately 8% can be capital (a strong possibility given candidate (that was, in fact,
expected by 2030. The growth continued appetite amongst seriously contemplating entry into
rates required to achieve this is venture capital firms to invest in the German market even prior to
moderate − far lower than that grocery delivery startups). the pandemic17). JD.com would
typically exhibited by be another, with the Chinese retail
e-commerce businesses and giant’s recent entry into the Dutch
attainable through existing market with Ochama underlining
players with significant its food omnichannel ambitions in
e-commerce offerings Europe.
expanding geographic coverage
and tapping into additional
consumer groups.
Accenture & GfK – Grocery Insights 2022 25Outlook 2030
Demographics driving grocery e-com growth
Although e-grocery spending has been growing by double-digits across all demographics over the past 5
years, avid online grocery consumers can be defined by some distinct characteristics, suggesting that the
growth of this market will be influenced by four key factors:
Spending power: consumers who wish to Urban density: despite the positive outlook
purchase groceries online currently tend to for e-grocery by 2030, the next few years
pay a delivery fee if their basket size is below a will probably not see e-grocery delivery areas
certain threshold and a markup for the extend to more rural locations. As with the
convenience that varies from player to player. Even expansion of broadband or public transport
if some players were to bring pricing closer to provisions, the lack of economies of scale currently
supermarket levels, at least in the medium term, limits profitable operations to more densely
e-grocery is expected to remain a premium service. populated urban areas. The expected decline in car
However, q-com players have reduced barriers for ownership on the other hand will make grocery
consumers to try e-grocery due to the lower delivery more attractive for consumers.
minimum-order values and delivery fees compared
to other providers.
Age: the oldest demographic groups will
become proportionally larger. However,
Need for convenience: working singles the familiarity with e-commerce and purchasing
and parents, who often find themselves behavior of 60-year-olds in 203 0 will not be the
strapped for time during stressful phases or life, are same as that of 60-year-olds today. The "catch-up"
particularly attracted to time-saving approaches to due to cohort effects, particularly in older
the weekly shop. The same applies to lifestyle generations, has been considerable in recent
group segments with limited mobility. years and will continue to be so.
Translated into family lifestyle groups, it is expected Hypermarkets
that the growth of e-grocery will be greatest The hypermarket format has experienced
amongst "social climbers/singles/DINKs" and "single considerable turmoil in recent years. The demise of
working professionals" lifestyle groups, followed by real,- has sent shockwaves through the market, and
"younger families". "Older Singles", "empty nest whilst it is expected that real,- stores taken over by
families" and "unemployed/working poor" competitors will be able to improve square meter
households will likely also have above average productivity, the broader loss of market share is
growth rates. unlikely to reverse.
However, demographic trends such as smaller
Implications for brick-and- households and reduced mobility (due to an
mortar incumbents ageing population and lower projected car
ownership rates) will slowly but steadily reduce
The growth of e-commerce will outweigh overall the attractiveness of large greenfield hypermarket
market growth significantly. Consequently, the locations. Considering both in tandem, a slight
brick-and-mortar grocery market share in Germany decline in brick-and-mortar market share for
will shrink. We expect the physical store landscape hypermarkets can be expected in the period
to be divided into key formats broadly like today, to 2030.
although some of the developments seen over
recent years will continue to evolve.
26 Accenture & GfK – Grocery Insights 2022Outlook 2030
Discounters 40%
In the years before the pandemic, discounters
modernized their store concepts and were able 37%
to stabilize market share. The pandemic put a 35% Discount 35 %
considerable dampener on this, with market 35%
share falling by 2 pp. (2021 vs. 2019). During the
pandemic, shoppers wanted to visit as few stores m arkets
Super 32 %
as possible and thus tried, where possible, to make
one-stop shopping trips, which supermarkets 30%
30%
benefited from. Coupled with the longer-term trend
of decreasing shopping trip frequency, the trend
of one-stop shopping will likely remain after the 27%
pandemic. Moreover, we see a decline in discount 25%
spending in demographics with traditionally the
highest discounter spending shares (i.e. "low-
income families" and "older families"). This points
towards a strategic problem for discount retailers 20%
that could prevent market share recovery without
a significant change in strategy or consumer 17%
preferences (e.g. driven by strong and continued 15%
inflation or hard recession). Specia
15% lists
13% 13 %
13% Hypermarkets
Supermarkets
Full-range supermarkets have enjoyed the greatest 12 %
brick-and-mortar success before and during the 10%
pandemic times across all demographics due to
trends towards sustainability, quality/
premiumization and one-stop shopping. This 6% 6% Drugstore Chains 6%
provides a solid basis for further growth, and we 5%
expect the supermarket segment to be the
strongest performing segment within brick-and-
mortar in the near future, although the growth rates
during the COVID-19 pandemic are unlikely to be 0%
replicated again. 2017 2021 2030
Others
Non-branched specialist retailers and drugstores Figure 12: Projected share of formats within
are expected to continue their development path brick-and-mortar grocery (based on 2017 – 2021
of recent years. actuals10)
Accenture & GfK – Grocery Insights 2022 27Outlook 2030
German grocery market
projections including e-com offerings to help counterbalance the decline in
brick-and-mortar market share.
When considering the developments outlined
above within the broader grocery landscape It is important to note, that brick-and-mortar players
including e-commerce, it is evident that given the do have the chance to participate in the e-grocery
relatively sluggish growth prospects, there is a clear part of the industry and achieve higher market
urgency for many traditional retailers to adapt and shares overall compared to only looking at their
expand their e-commerce and omnichannel brick-and-mortar projections.
Scenario 1: Scenario 2: Scenario 3:
Conservative Growth Medium Growth Strong Growth
40% 100% 100%
35% Disco 35% 35%
unt
rkets
30% Superma 30% 30%
25% 25% 25%
20% 20% 20%
15% Spe 15% 15%
cial
ists
Hyperm
arkets
10% 10% 10%
Drugstore
Chains
5% 5% 5%
E-Commerce
& Omnichannel
0% 0% 0%
2017 2021 2030 2017 2021 2030 2017 2021 2030
Figure 13: Brick-and-mortar format shares of the total grocery market plus e-commerce & omnichannel
(based on 2017-2021 actuals10)
28 Accenture & GfK – Grocery Insights 2022Outlook 2030
Even conservative e-grocery growth limits the leeway
for pure brick-and-mortar offerings substantially. Grocery
retailers still have the chance to counterbalance if they
adapt and expand their e-commerce and omnichannel
offerings.
Accenture & GfK – Grocery Insights 2022 29You can also read
