Markus Schröder explains top discounter, convenience and EV trends in DACH

Schröder knows a lot about categories. His 30-year career in retail has been largely focused on category management, but across a range of different retail formats and countries.

Prior to Denner, he was a global category manager at Shell for six years and had previously worked at Aldi Suisse, the Thalia bookshop chain and Globus department store.

He joined Denner three years ago and is responsible for beverages

Discounters are evolving away from the no-frills, 600 skus business model into more complex organisations, although still with reduced scope and standardised store layouts, Schröder says.

“The product and offer side is much more diverse than in the past,” he says.

Convenience solutions

“Generally, I see convenience products as a big opportunity, especially as the market in Switzerland is quite mature,” he says.

Shifts in meal occasions and the trend for breakfast and lunch to be eaten out of home, while dinner is at home, provide another opportunity for tailored solutions, Schröder says. “We are at the beginning of the journey with regard to the upside in terms of missions and meal replacement solutions,” he says.

Healthy eating is another growing segment in Switzerland. The increasing range fragmentation is trickier for a discounter to address, especially in a smaller store footprint: Denner trades from approximately 400sqm versus 1,200sq m at other discounters, Schröder says.

“But we are focused in that segment and play it in promotional weeks to show to the consumer that we do carry those ranges,” he says.

Convenience and roadside retail

Schröder has a keen eye on the wider convenience and roadside retail developments in Switzerland; as well as the evolution of the market in Germany.

New Swiss innovations include a new concept from Migrolino with Vapiano, a German pizza chain; Valora’s new avec format and Autogrill on roadside locations.

“There are a lot of ideas and innovation in the same space,” Schröder says.

In tandem, there is continuous improvement at existing leading players, Migrolino and Coop, in terms of in-store execution and coffee loyalty programmes.

In Germany, meanwhile, competition in roadside and convenience retail is hot, particularly since Circle K took over Total’s German sites.
“There’s massive investment in the German convenience sector,” Schröder reports.

Today, Circle K; Shell; EG Group, which has a partnership with Rewe Express; BP/Aral and its alliance with Rewe To Go; plus kiosks, all compete and have driven the arrival of new categories.

“Historically, convenience was more focused on tobacco and drinks, but has now expanded into other missions and, depending on the size, oil companies and convenience chains are targeting the offer according to the potential of the locations,” Schröder.

EG Group, in particular, is maximising this local opportunity with new food-to-go and coffee clip ins such as Lavazza, he adds.

Looking ahead, Schröder suggests there will be a polarisation of sites.

“I’m not sure if small shops will have an existence going forward, but there is an opportunity for smart and unmanned kiosk sites with access to be on one side of the portfolio and then multi-brand sites like EG-Group – destination and flagship sites with an EV charging position.”

EV

As an EV driver, Schröder says he’s quite pleased with the density of the EV charging network, particularly in Germany and especially the south. However, the EV charging market is very different and fuel retailers need to be aware that it is far more transparent- especially with regards to pricing he cautions.

Schröder highlights two key strategic EV charging providers: discounters and fast food chains.

The former have sited EV charging at almost every store, but the quality is dependent on the location i.e. at sites far away from motorways, they offer 22 kW versus 150kW at sites close to motorways, in order to drive traffic to stores.

The pricing for fast-charging is significantly cheaper than rivals too – 39 cents per kWh at Aldi versus 79 cents per kWh at Shell, for example. The discounters have another advantage, Schröder says with their food and non-food offer, plus with additional offers and services such as pharmacy and toilets, they can provide a better experience than a forecourt store during a 30 minute charging time.

Restaurant chains and fast-food operators are also eyeing the EV charging opportunity and strategically tieing with EV charging companies to get into that space, Schröder reports. Examples include the German pizza chain L’Osteria, which has locations close to motorways.

“Roadside retail has significantly lower entry barriers so will put pressure on oil companies and will change the dynamics significantly, in my view,” Schröder says. “Shopping in a discount, or drug store or full blown restaurant is very attractive from a shopper perspective – there’s more convenient parking and shoppers don’t mind spending 30-40 minutes in those locations.”

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