In brief

In brief

  • Accenture partnered with GfK to generate key scenarios for the German food retail industry in 2030.
  • We evaluated current consumer trends and market developments and examined the ingredients of successful e-grocery offerings.
  • Quick-commerce and aggregator platforms have been analyzed regarding business model, outlook, and their potential as partners for incumbents.
  • Clear recommendations and priorities for grocery retailers help achieve and accelerate the required transformation.


While there is no doubt that COVID-19 has led to a rapid and fundamental shift in consumer behavior, grocery retailing was already embarking on a dynamic evolution before the pandemic started. Three consumer trends stand out in particular:

Convenience

Accenture research shows that consumers expect retailers to make shopping more accessible, easy and efficient.

In recent surveys, one in three Germans expressed that they simply don’t have the time for traditional shopping. Rather, many seek services that work to their schedule and free up time for them for other, more meaningful activities.

Individualization of needs

There have never been more nutritional trends than there are today.

Confronted with highly fragmented consumer demands, grocery retailers reflect their needs through their offerings. German supermarket in the 1980s offered around 6.000 different products, whereas today they can even run into the tens of thousands.

Experience focus

In a digitalized world in which relationships are forced from physical to digital world, shopping for consumers is a way to feel a sense of belonging.

Accenture research shows that one in four consumers prefer shopping in-store to online, if it means they can spend time with friends and family while doing it. Accordingly, shopping is no longer about the material value; it is also a form of entertainment.

Future growth of grocery e-com

Despite lagging behind other European countries such as the UK and France, e-grocery is set to come to the forefront of German food retailing in the run up to 2030. The key question will be how fast and pervasive this shift turns out. We see three significant scenarios occurring by 2030:

8%

Market share for e-grocery can be expected given the 10-year maturity gap between the UK and Germany remains. Required growth rates are moderate.

12%

E-grocery share assuming a consumer-based market maturity gap of five years to UK and continued e-com growth in the low double digits.

17%

E-com & omnichannel share, including a new player with an omnichannel-focused brick-and-mortar network complementing a comprehensive e-grocery offering.

E-commerce and digital services in food retailing will pose a serious threat to traditional sales channels and players.

With a grocery e-com and omnichannel share of up to 17% of the total market, the leeway for pure brick-and-mortar offerings would be limited substantially. There is a clear urgency for traditional retailers to adapt and expand their e-commerce and omnichannel offerings to help counterbalance the decline in brick-and-mortar retail.

It would be costly mistake for established grocers to let new competitors enjoy an early-mover advantage on top of their vast amounts of venture capital or cash reserves.

How to respond to the disruption? Key insights for German grocery retailers

The projected developments in the German food retail market require a major transformation of incumbent retailers. With few exceptions, major brick-and-mortar players currently do not have comprehensive e-grocery offerings ready to scale. This leaves the industry vulnerable to disruption from new entrants and pure players. Retailers need to define their target customer and crystallize their unique proposition and operating model based on that. Explore all our insights to achieve and accelerate this transformation:

  • Risks from new business models
    Partnering with instant-delivery companies and aggregators like Instacart appears as an obvious solution to work around gaps in own capabilities with limited investment. However, this strategy comes with risks for brick-and-mortar grocery retailers.

    Understand key threats that grocery retailers face when partnering with quick-commerce (q-com) and aggregators and how to mitigate them.

  • Differentiation strategies
    Consumer needs are becoming more and more differentiated. The one-size-fits-all proposition of grocery stores no longer appears to be a viable long-term strategy. To address consumers’ different expectations, brick-and-mortar grocery retailers need to re-think their purpose and sharpen their positioning.

    Explore the five dimensions of differentiation that offer grocery retailers new opportunities to capture market shares.

  • Omnichannel optimization
    Even before COVID-19, grocery retailers had to contend with ever-changing consumers’ needs. 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.

    Discover the five areas for grocery retailers to unleash their omnichannel potential and read why some online business models may not work for every retailer.

  • Capability priorities for grocery retailers
    Read about key capabilities for grocery retailers in the domains of sustainability, pricing, assortment optimization, retail media, demand forecasting, in-store technology and last mile delivery that drive innovation and growth.

Alexander Grunwald

Manager – Retail Strategy


Dr. Rabea Schrage

Retail Strategy Consultant


Dr. Peter Rinnebach

Managing Director – Accenture Strategy, Retail


Michael Kahle

Managing Director – Retail Strategy & Consulting

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