Why Germany is lagging behind when it comes to online grocery retailing

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Consumers in Germany are avid online shoppers when it comes to fashion, electronics and travel. According to a current study by the market research company NielsenIQ, they are even among the pioneers of e-commerce in Europe for these product groups.

There is only one area where the Germans lag behind: when it comes to food and consumer goods such as personal care products. Most of the people here are loyal to the Rewe, Edeka, Aldi, Lidl and Co. stores. “When it comes to online retailing of food and other consumer goods, Germany brings up the rear in Europe,” said retail expert Thomas Montiel Castro from NielsenIQ, summarizing the results of a current study by market researchers. “Germany is really behind here and Corona has not changed anything.”

The statement amazes at first. Because there is currently more going on in the online grocery trade in Germany than ever before. An almost unmistakable number of new delivery services such as Gorillas, Flink or Picnic are pushing their way onto the market with hundreds of millions of euros in venture capital behind them, and are competing with established grocery retailers. In more and more cities, the small electric cars from Picnic and the bike couriers from Gorillas or, Flink, are now cruising through the streets and delivering online orders to your home.

According to its own statements, Picnic now supplies more than 250,000 customers in over 45 cities in North Rhine-Westphalia, while Flink brings goods to their homes in 41 cities across Germany. Competitor Gorillas currently offers delivery in 23 cities. And the Cologne retail giant Rewe, which is playing a pioneering role among German retail chains in the field of e-commerce, is also continuously expanding its online pillar. “We have increased sales in e-commerce again this year by around 50 percent – to over 700 million euros,” said Rewe boss Lionel Souque of the German press agency. Rewe currently offers a delivery service for goods ordered online in 75 cities and will expand this offer to the Ruhr area in 2022.

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The competition from Gorillas, Flink, Picnic and Co. sees Souque calmly. “It’s growing very quickly, but it’s still totally unprofitable,” says the manager. But he also admits: “It won’t go away again. Because for some of the customers such offers are very interesting. But in the end only one or two providers will survive. ”Rewe itself has a stake of less than 10 percent in the fast delivery service Flink in order to be present in this area as well.

But Rewe’s main focus is on its own delivery and collection service. The retail giant is still not making any money with its e-commerce offering. “It will be a few more years before we are in the black in online retail – but that will come,” says Souque. Despite these efforts, the online trade in groceries and other consumer goods continues to play a subordinate role in Germany, according to NielsenIQ. According to market researchers, e-commerce accounts for less than two percent of sales in food and consumer goods. For comparison: According to the study, in Great Britain it is 13.8 percent and in France at least 10.8 percent.

“Consumer goods are mainly bought on the Internet when there is no other way of getting to the products,” says Montiel Castro, describing the situation in Germany. To a large extent, it is about niche products that are difficult to get in the supermarket next door – or about avoiding lugging heavy loads.

An important reason for the low success of the online offers is – on this the experts agree – in the large number of supermarkets, discounters and drugstores in Germany. The nearest shop is usually only a few minutes’ walk away. Another reason: unlike in other EU countries, most of the large retail chains in Germany are not very present online, emphasizes Montiel Castro. According to a recent study by the Cologne Institute for Retail Research (IFH), only around 24 percent of people in Germany really have a choice between delivery providers online.

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“In Germany there is still a lack of sufficient consumer goods offers on the Internet. If there were, more people would do their big weekend shopping online, ”says Montiel Castro with conviction. For the NielsenIQ experts, when the big breakthrough for online retailing will also come about in the hands of the supermarket chains. “


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