Coping on the Coronavirus Front Line – NACS German Market Report

Christian Warning, NACS Regional Representative for German speaking markets

‘Pandemieʼ is German for Pandemic. In my first interview focused on Germany, Iʼve learnt a new word, but this virus doesnʼt care if youʼre British, German, Chinese or American, it affects us, our economy and our industry the same way.

In this series of interviews, Global Convenience Store Focus talks to retailers and experts in markets worldwide to find out how our convenience stores on the retail front line are coping.

Christian Warning is NACS Regional Representative for German speaking markets, based in Hamburg, Germany. In many ways experiences are very common to the UK and other markets with panic buying relatively common and special measures required;

Itʼs in the supply chain

“Toilet paper and flour – Germans are preparing to bake their bread at home, also noodles, rice and long lasting products. Of course, itʼs not really a shortage, itʼs in the supply chain, but many people are still shopping in quite a crazy way.

Empty shelves – a familiar sight around the world as supply chains adjust to catch up

Because self-checkout is still relatively rare in Germany, most transactions are face to face and protective screens have quickly been introduced to help safeguard staff. Shop fitting suppliers to the German industry have been fast to react in a very helpful way, quickly providing ‘survival kitsʼ for retail industry with stickers, floor signage to regulate extra space for queues and so on”.

In this context I asked Christian how he felt the convenience industry was fairing;

“The importance of our industry is enormous – with our brick and mortar infrastructure, convenience & grocery retail and gas station network – they are doing a great job at the moment in Germany. Legally, even every little kiosk which is selling newspapers is open and is as relevant for information, as gas stations are for the fuel supply.

Our industry colleagues are the last “women and men standing” to keep the engine running! It shows the importance of our infrastructure. I think once this crisis is over the smaller space convenience retailers will remain a higher priority for suppliers because of this.”

Political leadership

A national survey published today shows that 2/3 of the German population are satisfied with the political leadershipʼs response to the crisis. However, some Germans feel with that with regard to Italy, governmental reaction time has been too slow and that itsʼ federal decision making power structure is not one which is well suited to dealing with this kind of systemic crisis.

But 30 years after reunification a restriction of the freedom of movement in Germany is rightly a particularly difficult decision for the authorities. They also feel that it has led to inconsistent messaging between regions, with big cities ignoring advice to stay at home. There is also huge concern about the impact on the German economy and its capacity to cope. Politicians are now stepping in however;

“On the economic front, Germanyʼs Chancellor Merkel had promised earlier that there would be liquidity assistance for companies.

By Friday of last week, Finance Minister Olaf Scholz and Economics Minister Peter Altmaier were announcing a pledge of unlimited cash for companies affected by what is likely to be a severe credit crunch accompanied by a recession.

In an echo of a famous quote by Mario Draghi, president of the European Central Bank during the 2008 eurozone crisis, Scholz said: ‘This is the bazooka, and we will use it to do whatever it takes.ʼ

‘GloLocalisationʼ

How does Christian see the future?

“Because of Germanyʼs manufacturing focus, there is a new concentration on the question of the reliability of supply chains and security of supply. The new buzzword for this in Germany is ‘GloLocalisationʼ and of course this will tend to further encourage German consumers in their appreciation of local and regionally made products for our sector too.

Questioning the reliability of supply chains and security of supply

There could also be consequences for personal, as opposed to public transportation.

Consumers are seeing the merits of having their own personal transportation and the disadvantages of planes, trains and buses, or even hire and share cars when something like this happens. Creating safe, private personal space has been becoming more important in countries like China for some time as we discovered during the NACS Convenience Summit Asia in China last March”.

A quantum leap for digital transformation

Christian sees change ahead, particularly in respect of technology:

“A back to normal” will not happen – the digital transformation will take a quantum leap, especially the acceptance of online food retail and delivery as well as digital payment methods which are likely to be used by the growing number of elderly people in Germany.

Contactless mobile payment app pushed at Edeka

All kind of new business models especially around AI and robotics will be introduced even faster into the retail industry. In terms of our industry, this may turn out to be a tipping point for a whole range of technical transformation which would have otherwise taken years to accomplish”.

Clear-sighted action

Although being highly realistic that the worst was yet to come, Christian remains upbeat. Human ingenuity tends to be stimulated when under the kind of immense pressure we are all collectively experiencing today: “I personally believe that a coping feeling will occur – the world seems new and fresh again and we are suddenly full of energy.

To cope means neuro-biologically, the fear adrenaline is replaced by dopamine, a kind of endogenous future drug. While adrenaline leads us to escape or fight, dopamine opens our brain synapses: We are curious. When we have a healthy dopamine level, we make plans, have visions, which bring us into clear-sighted action”.

I very much agree with him.