Analysis: Inside REWE’s pet store rollout in Germany

A 2-year, 4-store pilot in Hamburg has resulted in German retailer REWE Group’s nationwide expansion of its ZooRoyal pet care stores being green-lit.

The almost 100-year-old company is Germany’s second-largest supermarket player and operates as a cooperative with stores across 21 countries. However, the opening of physical stores to build on the success of its online presence is a testament to the pilot’s success.

Successful start

GlobalPETS has spoken with the Cologne-based group, which notes the success and optimism of the initial trials.

“All pilot stores in the Hamburg area got off to an extraordinarily successful start and have since enjoyed continuous positive development,” Marcel Bersch, Managing Director for ZooRoyal Petcare at REWE Group, tells GlobalPETS in an interview.

The company will consider city locations for expansion due to the high number of pets relative to the human population. The new stores will all be operated by independent REWE retailers, with the ZooRoyal stores not required to be adjacent to food stores.

“We are not only looking for the right locations but also for committed local retailers,” Bersch explains. “[The cooperative model] allows our retailers to expand their business while ZooRoyal benefits from their experience in stationary retail.”

Competitive strategy

The rollout pitches ZooRoyal against established physical pet stores in the German market, such as Fressnapf and Zooplus, but REWE is confident that it is providing a compelling customer experience that will differentiate it from its competitors.

Key to this is utilizing proven systems in the company’s supermarkets and the ZooRoyal online channel, such as color-coding by pet type, to help pet parents quickly find the products they need in-store, even on their first visit.

The product range will also be extensive, with around 15,000 options. However, there is flexibility to enable independent operators to tailor the offering to their local market, including regional products or offering startups retail space for innovative new products.

Some popular elements of the pilot stores are likely to appear across the portfolio, such as washing stations, groomers and veterinary practices, which are an integral part of REWE’s strategy. And the market’s meter-long “snack bars” are a special highlight, offering unpackaged pet treats.

Logistical experience

REWE Group’s logistical expertise will also be central to the success of the ZooRoyal stores. Annika Müller shares that a new investment will be made in distribution capabilities for the pet stores.

“ZooRoyal can rely on REWE’s highly organized supply chain. In the future, we will bundle the logistics for our stationary ZooRoyal business at a new warehouse location near Nuremberg,” states REWE’s Marcel Bersch.

Further expansion

The company is focusing its physical pet store rollout on the German market, at least for now, but the ZooRoyal brand is already expanding beyond country borders.

The ZooRoyal online store offers over 12,000 items to customers in Austria and Switzerland. Furthermore, their private label range is available at supermarket chain BILLA, drugstore player BIPA and discount supermarket chain PENNY.

An omnichannel strategy is crucial for the brand, with physical stores complementing its online offering.

“The experiences from the pilot markets confirm what we already know from the combination of shop-in-shop in food retail and our online store: The different sales channels strengthen each other and make a positive contribution to the overall.