European supermarkets must change to compete

Chris White

Managing Director at Fruitnet Media International GmbH

May 15, 2016

Rewe boss Alain Caparros has some very interesting things to say about the future of food retailing in Germany in today's newspaper.

Interviewed by Die Welt am Sonntag, the 59-year-old chief executive of the country's largest food retailer prophesies the end of discounting as we know it, and says [my translation]:

"The supermarket of the future will be less a shop and more a meeting point. We need to make it place for new experiences and for new opportunities to consume, so that the people who come into our shops are no longer just our customers but also our guests"

Caparros reckons the traditional discounter is on the way out in Germany: Aldi and Lidl are upgrading their stores to the point where the dividing line between them and a supermarket chain like Rewe is going to disappear.

Other leading food retailers in Europe would do well to pay attention to what the chief executive of Rewe is saying. After all, Germany's biggest food retailer is in the same boat at they are, but has the added problem that the discounters already account for half of all food sales in his home market. Aldi and Lidl are growing fast in France, Italy, and Britain, taking market share each and every quarter.

To compete, Caparros says Rewe needs to have more stores in Germany's city-centres, and that they need to be open longer. So it's about quality and price and convenience.

Perhaps Carrefour City is an example of what Caparros is on about. There are now some 5,000 City outlets in France - they've also opened a few stores in Madrid - and they're just the kind of high-end, city-centre convenience store that I'd like to shop in. In fact, I like Carrefour City so much that I made a short video about my recent visit to one in Avignon.