REWE Group
Annual Report 2020

New
business segment Convenience

Lekkerland
By acquiring the Lekkerland Group, the REWE Group has created a new strategic business area: Convenience. The new business segment is bundling the strengths of both companies to become a major player for on-the-go consumption.

A freshly made sandwich, a crisp salad, juicy fruit or a steaming cup of coffee – more and more people are making a habit of eating and drinking while they are on the go. Young people are leading the way. Surveys have found that they like the “really practical” option of buying something quickly in supermarkets, news stands or petrol stations that tastes great, offers exceptional quality and, ideally, is also healthy. “The most powerful trends in food retail include on-the-go consumption and eating out and will play an even greater role in future,” says Lionel Souque, CEO of the REWE Group.

The REWE Group recognised this trend at a very early stage and responded by continuously expanding and enhancing its range of convenience products and putting its REWE To Go concept into action. Today, customers across Germany can visit more than 600 REWE To Go shops at Aral petrol stations or in train stations and pick up food and beverages while they travel. As part of the merger with the Lekkerland Group, one of the leading specialists for on-the-go consumption, the REWE Group has set up a new business area: Convenience. Both companies have combined their strengths in this segment: REWE’s expertise in the areas of products and category management perfectly complements Lekkerland’s logistics skills and multifaceted knowledge about wholesaling. Lionel Souque believes that this combination will be a “convincing recipe for success” that will enable the company to become an even bigger player in an important segment of the food retail market.

Lekkerland
in numbers

Lekkerland guarantees 24-hour service from order to delivery

around
5.000
employess in Europe, including more than 3,200 in Germany
more than
55.000
products in its range, including 15,000 in Germany
around
85.800
sales outlets are supplied by Lekkerland in Europe, including 63,200 in Germany

Investment in the logistics network of the future

The first tangible result of this new alliance will be a jointly developed logistics network that is scheduled to be in operation by 2030. “By creating this network, we are really focusing on significantly expanding our capacity and our ability to offer a fresh and ultra-fresh product range,” says Hilmar Hübers, Chief Operating Officer (COO) of Lekkerland. “This is where the growth fields for our customers are.” The REWE Group will invest a nine-figure sum in the Lekkerland Logistics in the coming years. In addition to new buildings, this will include building annexes and renovation projects. A decision has already been made to build a new central warehouse in Hanover. The facility is scheduled to go into operation at the end of 2022 and serve as a regional warehouse for tobacco, dry goods, fresh products and frozen food. Moreover, it will provide northern Germany with an increased number of dry goods and tobacco products. There are also plans for the construction of a second central warehouse in southern Germany. Other logistics locations will act as regional warehouses for the fresh and deep-frozen areas. As part of this effort, Lekkerland will begin operating a new logistics centre in Kerpen, located near Cologne, at the end of 2022. Lekkerland will use the facility to supply its customers in the major metropolitan region of Düsseldorf/Cologne/Bonn.

Why is such a logistics offensive necessary? Why can’t Lekkerland’s customers be supplied by the same warehouses as those used by REWE stores and vice versa – if both product ranges include the same items and both companies already have a dense network of warehouses? The main reason is the different needs of customers. While the REWE Logistics serves a largely homogeneous group of clientele who usually order large quantities of products with its stores, Lekkerland’s customers are very heterogeneous. Petrol station shops, news stands and coffee shop chains are part of this group, along with beverage wholesalers and system catering. It is essentially a wide spectrum of retail partners who frequently need very individual products and services. This group also differs from REWE stores in one other major way: the order volume. Lekkerland customers do not order by the pallet. Rather, they may request products – in the most extreme case – as individual items, things like premium wines. This ordering practise is largely the result of customers’ limited storage capacities and their range of low turnover merchandise. A news stand will frequently not have enough space to store items such as cases of beverages.

 

Tailored logistics solutions

Lekkerland’s sophisticated logistics system is specialised to meet the needs of retailers who have limited space. Its warehouse structure is also designed accordingly. Lekkerland offers its customers various order options, including digitally and by telephone. Digital solutions like the webshop Lekkerland24 or a link via cash register systems enable customers to place orders when it suits them most. The products are often delivered by state-of-the-art multi-temperature lorries. These vehicles have a storage compartment that is subdivided into three sections – for unchilled, chilled and frozen products. This means customers can receive all ordered products from different temperature groups in the same delivery and only receive one invoice. This is quite convenient for customers. Some products are sent by post, if this is the most efficient way to deliver them. “We always look for the most convenient solution for customers,” says Patrick Steppe, the CEO of Lekkerland.

Lekkerland’s product range extends from sweets, fresh bistro treats, beverages and tobacco to non-food products like car care items. Many of the company’s private label products are found in the range as well. These items include fresh, packed to-go products like salads, sandwiches and smoothies that are part of the Lekkerland private label “Go Fresh” or the coffee specialities of the “Coffee Bean Company”. The private label product range has around 360 products, and the number is expected to grow. The REWE Group is now contributing its product and category management expertise to Lekkerland’s continuous efforts to enhance its line of private labels.

 

Bespoke retail solutions

“We do not just regard ourselves as a supplier of products, but also as a company that provides our customers with bespoke retail solutions that enable them to generate profitable growth and stand out from the competition. These solutions include sales training courses, product range and shelf optimisation, shop consulting and complete shop concepts,” notes Patrick Steppe. The spectrum of services continues to expand: Lekkerland is now arranging contact with parcel delivery companies if they want to use their shops or news stands as a parcel station and provides them with marketing material to fuel its customers’ business.

Every service offered by Lekkerland underscores the company’s vision, which is to be “Your most convenient partner” in to-go consumption. Together with the REWE Group, it will be able to do this even more successfully in future.