The store in Aachen used to be a Schlecker drugstore.
By / DENISE KLUG ASSOCIATE ANALYST, PLANET RETAIL
Dutch grocery retailer ahold’s domestic albert heijn Operation has entered germany with its convenience Store concept ah to go. The first store is located in Aachen, a city close to the dutch border. It replaces A former schlecker drugstore with a sales area Of 80 square metres (860 square feet) and offers an Assortment of 650-700 skus.
Albert Heijn plans to open further AH to go outlets in Germany this year – all of which will follow the retailer’s recently-launched new food-to-go concept. “We do not see this as a test balloon”, said Ahold Germany’s Managing Director Jürgen Hotz.
Its sales area has been reduced to 80 square metres.
Exactly 125 years after the first Albert Heijn supermarket opened in the Netherlands, Ahold showed the courage to take the name to Germany. In doing so it is entering a market which is the home of discount giants Aldi and Lidl, a market close to saturation. One of Ahold’s biggest competitors, Delhaize Group, had taken on the German market before. The move failed and Delhaize was forced to close all its stores. One of these was in Aachen, the location of the first German AH to go.
However, Ahold has chosen to enter the market in a lucrative niche, one that is not in direct competition with the omnipotent domestic supermarkets and discount stores. Only one of the larger German retailers, Rewe Group, operates convenience stores. And Rewe’s network is anything but impressive – it comprises only two outlets so far.
The German bargain-hunting and no-frills discountloving consumer might not be amenable to a concept that offers advanced service and ease of convenience at a higher price. However, Ahold’s General Manager for Germany, Jürgen Hotz, told Planet Retail he believes in the potential for success of the concept in the country. “The people will understand it,” he said. “Discounters are also very convenient. They also offer a pre-selected reduced assortment and improved access.” Hotz knows what he is talking about – before he became responsible for Ahold’s German development he worked for Aldi and Tengelmann’s discount banner Plus.
PRIVATE LABELS AS A COMPETITIVE EDGE >>
According to Hotz, the convenience store is not overly expensive and offers a very good price-performance ratio. At Albert Heijn, prices are compared on a local level. Next to the newly-opened outlet customers can find a kiosk and a bakery. Albert Heijn has adjusted its prices accordingly and paid attention to the respective assortment. Incidentally, bakeries are very popular in Germany and have assumed the role of the absent convenience sector by offering sandwiches and cold drinks to go. “We see them as competitors,” the General Manager said, “Actually, we see everybody as competitors.”
Albert Heijn provides three different ‘Meal Deals’ a day. Here it is salad plus a bottle of water for EUR3 (USD3.76) at lunch time.
Ahold is able to offer a competitively-priced assortment thanks in large part to its sophisticated private labels. Around 50% of the products on offer are own brands, all of which are imported from the Netherlands. This gives Ahold a great competitive edge, as not only are convenience stores difficult to find in Germany, but adequate product ranges are also hard to come by. Ahold is the only retailer in the entire country able to offer an assortment consisting of so many different and well-considered ready-to-eat products. The range comprises salads, raw vegetables with dips, tapas and steamed meals – just to mention a few. Everything is absolutely fresh – even the instant soup has been spruced up with fresh shrimps on top.
The private labels are collected by one supplier in the Netherlands. This supplier delivers the items to wholesaler Lekkerland in Oberhausen, Germany, and Lekkerland finally delivers the goods along with A-branded groceries to the Aachen store.
Even if the assortment comprises many Netherlands-imported products there is only one small shelf featuring typical Dutch treats. The offering has been adjusted to German needs, so it boasts a variety of domestic beers while the amount of dairy products has been reduced. Lekkerland also supplies the store with regional brands such as Unilever’s sausage snack BiFi.
BIG PLANS FOR SMALL STORES >>
Ahold intends to be operating 10 convenience stores in Germany by 2013. All of these will be located in the federal state of North-Rhine Westphalia so the retailer will be able to continue importing fresh groceries directly from its home country. According to the General Manager, there are no plans to enter other states – not yet at least, for obvious logistical reasons. “However, North-Rhine Westphalia is a large market for us,” he said, “and it is very similar to the Netherlands regarding size and density.”
The next AH to go is to be opened in Essen. Altogether, Albert Heijn plans to open 150 convenience stores across Europe by the end of 2016.
