Relevant Success Factors for the Implementation of Convenience Stores in Germany and their Development in the German Market

Table of Contents

List of Tables

List of Figures

List of Abbreviations

1 Introduction

2 Basic Terms and Topic Definition
2.1 Convenience Store Definition
2.2 The two Convenience Store Types
2.2.1 The Classic Convenience Stores (C-Stores)
2.2.2 Included Convenience Stores (G-Stores)

3 Relevant Factors for the Successful Implementation of Convenience Stores with focus on Germany
3.1 Primarily External Factors
3.1.1 Population Density
3.1.2 Traffic Density
3.1.3 Opening Hour Laws
3.1.4 Potential C-Store Customers by Demography and Behaviour
3.1.4.1 Customer Demographics
3.1.4.2 Customer Mobility Types and their Behaviour
3.1.5 Competition
3.1.5.1 Direct Competition
3.1.5.2 Indirect Competition
3.2 Primarily Internal Factors
3.2.1 Location
3.2.2 Products
3.2.3 Real Estate
3.2.4 Logistics
3.2.4.1 C-Store Logistics
3.2.4.2 G-Store Logistics
3.2.5 Services
3.2.6 Marketing
3.3 Economical Factors 49

4 The German Way
4.1 G-Stores - A German Success Story
4.1.1 Historical Development
4.1.2 Market Reaction - Gas Stations filling a Gap
4.1.3 G-Store Partnership ARAL and REWE To Go
4.1.3.1 Conception, Testing Phase and ongoing Realisation
4.1.3.2 Data Analysis
4.2 Future Development
4.2.1 Quantitative Aspects of future Development
4.2.2 Qualitative Aspects of future Development

5 Conclusion 104 Bibliography 106 Appendices 123

Abstract

In Germany’s market many types of retailers exist and are part of peoples’ life. Looking at other continents and countries though, there is one type of retail store which is very common there but can hardly be found in Germany, the convenience store. This thesis is about factors for a successful implementation of convenience stores into the German market and its development so far. By writing this thesis the author tried to work on the relevant aspects of implementing and introducing a new store type to the German market. The author of this work looks at legal aspects, possible customers, infrastructural and geographical aspects as well as suitable store management and planning. Analysing given data and information as well as looking at the current and future development declares how to implement convenience stores into the German market. This thesis results in the fact that at this moment in time (January 2018) convenience stores, which are open 24/7, can almost only exist in cooperation with gas stations in Germany, because of legal restrictions by the federal states. Convenience stores in gas stations are most likely to become an established part of the German retail market in the next years. Even though it being new to Germany and its market the likelihood of this retail store type growing fast in Germany is high and more companies are almost certainly going to establish cooperated convenience store businesses in gas stations around the country.

List of Tables

Table 1: General shop opening hours in Germany between 1989 and 2003 ... 25 Table 2: Terms and key figures used to analyse mobility types and their behaviour

Table 3: Analysis results for labor mobility types of consumers

Table 4: Analysis results for leisure time mobility types of consumers

Table 5: Average €-turnover of German gas station shops 2008 to 2014 by product category

Table 6: (Law analysis subtable 1 of 3) exceptions shown in appendices 1 and 2 in detail

Table 7: (Law analysis subtable 2 of 3) exceptions shown in appendices 2 to 4 in detail

Table 8: (Law analysis subtable 3 of 3) exceptions shown in appendices 4 to 6 in detail

Table 9: Selected REWE To Go shops in ARAL gas stations

Table 10: Forecast of REWE To Go shops in ARAL gas stations until February 2021

Table 11 : Development of the number of gas stations per company in Germany since 2009 (start of year data)

Table 12: Bavaria: Change of population density and average age between 2015 and 2035

Table 13: Bavarian administrative regions: Youth- and olds-quotient

List of Figures

Figure 1: Most important success factors for convenience shops

Figure 2: Citizens per km² in Germany (heatmap)

Figure 3: Citizens per km² in Germany, Bavaria and Dachau county (heatmaps)

Figure 4: Development of population in Germany between 1990 and 2015 in %

Figure 5: Traffic density on German highways 2015

Figure 6: About 400 permanent traffic measuring points in Bavaria

Figure 7: Traffic quantity map 2015 for the Bavarian county of Dachau

Figure 8: Traffic density in individually defined areas

Figure 9: Average traffic densities for an individually defined area at certain times

Figure 10: Opening hours by federal states - synopsis of the results of appendices 1 to

Figure 11: German household size in % from 1991 to 2016

Figure 12: The segments of a trading area

Figure 13: Reilly’s law

Figure 14: Huff's law

Figure 15: Average G-Store turnover in € 2008-2014 shop combined

Figure 16: Buying / leasing break-even

Figure 17: Break-even point - classical illustration

Figure 18: An example for REWE To Go and ARAL as convenience shop partners ...

Figure 19: G-Store: Cumulated arithmetic mean value of visitor frequency

Figure 20: Break-even point - modified illustration

Figure 21: Number of grocery stores in Germany (1965 - 2010) by sales area extension

Figure 22: Sales area of grocery stores in Germany (1990 - 2010) in million m²

Figure 23: Decrease of supermarkets in Bavaria between 2005 and 2014

Figure 24: Call for action due to depopulation concerning quality of local supply

Figure 25: Regional numbers of supermarkets and discounter in Germany 2009

Figure 26: Mean distance to reach a supermarket or discounter in Germany in meters (m)

Figure 27: German gas stations using DKV services per 01/12/2017 (heatmap)

Figure 28: Reachability of gas stations within 15 min. by car (left) - driving 60 km/h (right)

Figure 29: Most important reasons to buy in convenience shops

Figure 30: G-Stores compared with some main distribution channels

Figure 31: Variety in German gas station market

Figure 32: Partnership between gas station companies and retail groups

Figure 33: Intraday fluctuation of diesel price

Figure 34: ARAL gas station with integrated REWE To Go shopping area

Figure 35: ARAL and REWE To Go openings (figure 1 of 3)

Figure 36: ARAL and REWE To Go openings (figure 2 of 3)

Figure 37: ARAL and REWE To Go openings and ARAL complete (figure 3 of 3)

Figure 38: Development of REWE To Go shops in ARAL gas stations until 30/11/2017

Figure 39: Average visitor frequency of selected stores

Figure 40: 0-1 standardised accumulated average visitor frequency of selected stores

Figure 41: Visitor frequency (Monday 0 am to Sunday 12 pm) of selected stores

Figure 42: Visitor frequency comparison Wülfrath and Dachau

Figure 43: Visitor frequency comparison Wülfrath and Munich

Figure 44: Visitor frequency comparison Dachau and Munich

Figure 45: Wülfrath visitor frequency by working days

Figure 46: Monthly development of REWE To Go shops in ARAL gas stations until 30/11/2017

Figure 47: Forecast of REWE To Go shops in ARAL gas stations until February 202192 Figure 48: Development of the number of gas stations in Germany since 1950 (start of year data)

Figure 49: Development of the number of gas stations (6 biggest companies) in Germany since 2009 (start of year data)

Figure 50: Development of all Bavarian household sices 1991 to 2016

Figure 51: Development of small Bavarian household sices 1991 to 2016

Figure 52: Bavaria: 1 and 2 Person Households in % and prognosis until 2035

Figure 53: Future regional changes in Bavarian demographic Structure (1 of 2)

Figure 54: Future regional changes in Bavarian demographic Structure (2 of 2)

List of Abbreviations

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1 Introduction

This work at hand deals with the relevant success factors for the implementation of convenience stores in Germany. Convenience stores are a worldwide phenomenon and increase in popularity all over the globe. Traveling and living in many Asian, North American and European countries I experienced how convenience stores are part of peoples daily life there. I started to wonder how and why these convenience stores are so popular and common in these other continents and nations but not in Germany. Looking at Germany there are no classic convenience stores to be found. The rise of convenience stores in other countries gives a perspective of how big a potential market in Germany could be. The German market changed quite a lot over the past years and new stores and companies emerged. Modified legal frameworks and cultural changes through globalisation and the internet gave a boost to new store concepts and ideas. A new retail concept for this market could profit from this trend of changes in the German society.

In this bachelor thesis the author wants to look for ways of how to implement convenience retail-store concepts into the German market in a most effective and sucsessfull way.

In chapter two convenience stores will be defined and the conceptual basics will be explained to give a basic understanding of the store type this thesis is about. Chapter three will deal with the relevant factors for the successful implementation of convenience stores in Germany and is divided into two subtitles, primarily external factors and primarily internal factors. Chapter four will be about changes and adaptions a classic convenience store might have to go through in Germany to be able to function in this specific market. It will also deal with a future forecast for a spread of convenience stores in Germany to show how the development of such a storetype expansion could look like. With a conclustion in chapter five this bachelor thesis will be completed.

2 Basic Terms and Topic Definition

The next points will explain and define convenience stores. First, the term convenience store will be defined, followed by an explanation of what “Classic Convenience Stores” and “Included Convenience Stores” are as well as their differences. This is important for the further understanding of the following points.

2.1 Convenience Store Definition

The convenience store concept was developed in the USA in the past century. Actually 97,504 (63,2%) of the 154,535 US convenience stores are “owned and operated by an individual with one store”¹ and have 9,702 sales transactions per week.² The word convenience means “Bequemlichkeit” or “Annehmlichkeit” in German and explains exactly what a convenience store is all about. With a relatively small product range and shopping area these types of retailers offer products that people might need on a daily basis. The shopping experience and time has to be convenient for the customer. This means that the customer doesn’t need to search for a product because it is clearly visible in a small store like this. Customers don’t need to spend much time buying something that they want and that is the main idea behind this retail concept. This type of shopping is referred to as “One-Stop-Shopping”. Convenience stores are usually found near big living areas or areas with a high frequency of people passing by. Very long opening hours up to twenty-four hours a day and seven days a week are another typical characteristic of these stores.³

2.2 The two Convenience Store Types

It is essential for this work to distinguish between these two types of convenience store concepts because both have different implementation approaches.

2.2.1 The Classic Convenience Stores (C-Stores)

The classic convenience stores can usually be found in North America and Asia. These tiny stores are very common there and widely spread. They are typically included in bigger buildings and always face the street. These retailers normally don’t offer own parking spaces because customers often live or work close by and buy in small quantities. It is not uncommon in North American and Asian nations that there is a convenience store to be found every few hundred meters in big cities. These stores are also called C-Stores⁴. The C in C-Stores stands for convenience.

2.2.2 Included Convenience Stores (G-Stores)

Included convenience stores always occur in combination with gas stations. These stores therefore are called G-Stores⁵ with G standing for gasoline. In this work included means the embedment of retail shopping area into a plain gas station. Possible are partnership G-Stores and single operated G-Stores. While partnership G-Stores usually are based on partnership contracts between at least two companies (for example ARAL and REWE⁶ ) single operated G-Stores are owned or leased by individual entrepreneurs. This kind of convenience store is typically seen here in Europe.

3 Relevant Factors for the Successful Implementation of Convenience Stores with focus on Germany

The following points will explain the relevant success factors for an implementation of convenience stores. The factors are divided by primarily external, primarily internal, and economical factors. All these points need to be considered before implementing a convenience store somewhere. As mentioned above in chapter two classic convenience stores are not common in Germany. The reasons will be exposed in chapter four. Therefore it is necessary to have recourse to international studies if appropriate and use German analysis results as far as available, for instance the outcome of a customer survey shown in figure 1.

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Figure 1: Most important success factors for convenience shops

Source: Own presentation using data from TEGELBEKKERS, Andreas and Dr. Jörg SIEWECK, 2017. Branchenreport Convenience [online]. Neuwied: LPV GmbH [Accessed on: 18/01/2018]. PDF, p. 31. Available under:

http://www.marktstudien24.de/WebRoot/Store21/Shops/62326503/585A/9AB1/1CD5/483D/476 E/C0A8/2BB9/F58C/Auszug_Branchenreport_Convenience_2017_2.pdf.

The corresponding consumer needs to be satisfied by convenience stores, may be described in short form as in-time, instant and individual.⁷

3.1 Primarily External Factors

External Factors are things that can have an impact on a company from the outside.⁸ Usually they cannot be influenced or changed measurably by any company. The external factors which will be worked on in this thesis are population and traffic density, opening hour laws, customers, and the competition.

3.1.1 Population Density

The population density of regions in Germany is something important to look at when thinking about implementing a convenience store since convenience stores should always be in highly populated areas or regions where many people pass by (see point 2.1). Areas with less population are therefore only interesting if a lot of infrastructure for the transport of people exists or if there is a lack of retail stores. The following heatmap (figure 2) shows the population density per km² in Germany.

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Figure 2: Citizens per km² in Germany (heatmap)

Source: Own presentation using data from DSTATIS STATISTISCHES BUNDESAMT, 2017. Städte (Alle Gemeinden mit Stadtrecht) nach Fläche, Bevölkerung und Bevölkerungsdichte am

31.12.2015, im Juli 2017 wegen korrigierter Fläche revidiert [online]. July 2017 [Accessed on: 14/11/2017]. Available under:

https://www.destatis.de/DE/ZahlenFakten/LaenderRegionen/Regionales/Gemeindeverzeichnis/ Administrativ/Aktuell/05Staedte.html.

Looking at figure 2, the reader might suppose that there are areas in Germany where it would not be wise to implement a convenient store because the population density is too small considering population density only. The best areas for a store concept like that are the yellow to red spots on the map. The most interesting regions would therefore be Baden-Württemberg, some areas in Bavaria, Saarland, Rhineland-Palatinate, Hesse, North Rhine Westphalia, some areas in Lower Saxony, Bremen, Hamburg, Schleswig-Holstein, Berlin and Saxony. Regions with a comparatively small population density are Mecklenburg-Vorpommern, Brandenburg, Saxony-Anhalt and Thuringia. Taking into account only the population density the states with a low degree are less interesting for the implementation of convenience stores.

It is, however, necessary to prepare reliable investment decisions concerning the opening of a convenience store on a more disaggregated amount of information and with respect to other relevant factors, e.g. the density of already existing local supply.

While statistical information for Germany are provided by the Federal Statistical Office of Germany (Destatis) in Wiesbaden, there is much more state-specific data to recall in more depth by using the online data pools of the respective state offices. To give an example figure 3 below shows the heatmaps of the population density in Citizens per km² using data provided by the Statistical Office of Bavaria (Bayerisches Landesamt für Statistik). In this case the author was able to break down the statistical analysis from an all-German level (see figure 2) to a single state (Bavaria), its rural districts and big cities and even smaller communities shown by reference to Dachau County.

The availability of gratuitous online information of such a high reputation and quality allows profound analysis of possible suitable convenience store locations. Thus it makes an essential contribution to an optimal site selection.

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Figure 3: Citizens per km² in Germany, Bavaria and Dachau county (heatmaps)

Sources: Own presentation using data from DSTATIS STATISTISCHES BUNDESAMT, 2017. Städte (Alle Gemeinden mit Stadtrecht) nach Fläche, Bevölkerung und Bevölkerungsdichte am 31.12.2015, im Juli 2017 wegen korrigierter Fläche revidiert [online]. July 2017 [Accessed on: 14/11/2017]. Available under:

https://www.destatis.de/DE/ZahlenFakten/LaenderRegionen/Regionales/Gemeindeverzeichnis/ Administrativ/Aktuell/05Staedte.html.

BAYERISCHES LANDESAMT FÜR STATISTIK, GENESIS-Online, 2017. Table 12421-002r Regionale Vorausberechnung: Kreise, Bevölkerung, Geschlecht, Stichtag [online]. [Accessed on: 05/12/2017]. Available under: https://www.statistikdaten.bayern.de/genesis/online/ data?operation=begriffsRecherche&suchanweisung_language=de&suchanweisung=12421- 002r and table 11111-001r Fläche: Gemeinden, Stichtag [online]. [Accessed on: 05/12/2017]. Available under: https://www.statistikdaten.bayern.de/genesis/online/data?operation= begriffsRecherche&suchanweisung_language=de&suchanweisung=11111-001r.

DEUTSCHLAND-KARTE. Deutschland Karte Online [online]. [Accessed on: 18/01/2018]. Available under: https://deutschland-karte.org/.

PROSPECT EXPRESS GMBH. Landkreiskarten Bayern [online]. [Accessed on: 18/01/2018]. Available under: https://www.prospekt-express.de/landkreiskarten-bayern/.

LANDRATSAMT DACHAU, Die vier Arbeitsteilräume [online]. [Accessed on: 18/01/2018]. Available under: http://www.siedlungsentwicklung-dachau.de/Teilraeume.aspx.

It is also important to have a look at the development of population in passage of time to get an imagination about trends as basis for actual and future economic decisions. Figure 4 shows the development of population in Germany between 1990 and 2015 and between 2012 and 2035 in %.

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Figure 4: Development of population in Germany between 1990 and 2015 in %.

Source: DEUTSCHER BUNDESTAG, 2017. Raumordnungsbericht 2017 [online]. Bonn: Bundesamt für Bauwesen und Raumordnung, [Accessed on: 18/01/2018]. PDF, p. 29, 31. Available under: http://dipbt.bundestag.de/doc/btd/18/137/1813700.pdf.

3.1.2 Traffic Density

The Traffic Density is the second type of density which needs to be looked at for a right placement of convenience stores. Even if the population density in a certain region is not high the traffic density in that region could be immense. That means many people drive through this area. This factor is so important to know because convenience stores also are always economically useful in high frequented areas (see point 2.1).

The following figure 5 shows the traffic density on German highways as of 2015.

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Figure 5: Traffic density on German highways 2015

Source: BUNDESANSTALT FÜR STRAẞENWESEN, 2015. Verkehrsmengenkarte 2015 - Verkehr auf Bundesautobahnen (Datenquelle: Straßenverkehrszählung 2015) [online]. [Accessed on: 15/11/2017]. Available under:

http://www.bast.de/DE/Statistik/Verkehrsdaten/2015/Verkehrsmengenkarten.html?nn=797458.

In Figure 5 it is clearly visible which parts of the German highways are frequently used and which parts have a relatively small frequency of cars using it. Every location along the yellow zones to the black zones can principally be interesting for placing a convenience store. Figure 5 shows, that the traffic density around the biggest cities and between them is by far the highest. As already mentioned in chapter 3.1.1, however, there is a demand for more disaggregated information to prepare profound analysis concerning possible suitable locations for establishing new convenience stores. For this purpose traffic flow data for Germany is provided by Bundesanstalt für Straßenwesen. This data is automatically collected at 1736 current permanent measuring points by ongoing counting of vehicles using Autobahn and federal highways and provided at no charge in the form of tables and maps.⁹

More disaggregated information is raised and distributed by federal states. For example in Bavaria there are about 400 measuring points (see also figure 6).¹⁰ Filtering the above mentioned complete table for Germany with 1736 values, results in 350 permanent measuring points located in Bavaria. That means there are also about 50 permanent measuring points located at state and district roads within Bavaria. The traffic quantities measured there are processed and distributed for free in a five year time interval¹¹. For the Bavarian County of Dachau the results for 2015 are shown in figure 7.

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Figure 6: About 400 permanent traffic measuring points in Bavaria

Source: BAYERISCHES STAATSMINISTERIUM DES INNERN,FÜR BAU UND VERKEHR, 2016. Übersichtskarte Dauerzählstellen und Verkehrsbeeinflussungsanlagen (VBA) 2016 [online]. [Accessed on: 16/12/2017]. PDF. Available under:

https://www.baysis.bayern.de/web/content/verkehrsdaten/dauerzaehlstellen.aspx.

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Figure 7: Traffic quantity map 2015 for the Bavarian county of Dachau

Source: BAYERISCHES STAATSMINISTERIUM DES INNERN,FÜR BAU UND VERKEHR, Verkehrsmengenkarte 2015 Dachau [online]. [Accessed on: 16/12/2017]. PDF. Available under: https://www.baysis.bayern.de/web/download.ashx?i=a45294b4-dddb-49fb-884d-903c80a21192.

In online ages, however, there are more modern proceedings to go even further in level of detail. As GOOGLE Maps not only uses GPS¹² but also smartphone data of cell phones with activated GPS function and transmission of anonymised geo-tracking data¹³, it is possible to combine these information and display localities together with the density, frequency of visitation and movement by the appropriate cell phone users. Zooming into figure 7 allows focussing on image details as shown in figure 8 (clockwise).

Such disaggregated information will be helpful for planning an optimal location for a convenience store. Unfortunately, currently there is no data available between 10 pm and 6 am (see figure 9) to get an imagination about late night- time traffic. This period is of particular interest as will be shown later in chapter 3.3.

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Figure 8: Traffic density in individually defined areas

Sources: Own presentation using information from BAYERISCHES STAATSMINISTERIUM DES INNERN,FÜR BAU UND VERKEHR, Verkehrsmengenkarte 2015 Dachau [online]. [Accessed on: 16/12/2017]. PDF. Available under:

https://www.baysis.bayern.de/web/download.ashx?i=a45294b4-dddb-49fb-884d-903c80a21192.

GOOGLE Maps, 2017. [online]. [Accessed on: 20/01/2018]. Available under: https://www.google.de/maps/@48.2592135,11.4669688,16.5z/data=!5m1!1e1.

If the travelling situation function is activated in GOOGLE Maps, a box on the bottom of the display allows, to select the traffic situation for the actual time or the mean values for any day of the week, usually in 10-minutes intervals between 6 am and 10 pm. Streets with little traffic are displayed white or green and more traffic is indicated by orange to red and dark red. The results are illustrated for four times (6 am, 8 am, 2 pm and 10 pm) during an average Monday in figure 9:

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Figure 9: Average traffic densities for an individually defined area at certain times

Source: GOOGLE Maps, 2017. [online]. [Accessed on: 20/01/2018]. Available under: https://www.google.de/maps/@48.2592135,11.4669688,16.5z/data=!5m1!1e1.

3.1.3 Opening Hour Laws

One of the most crucial elements defining convenience stores is the opening hours. Usually classic convenience stores are open 24/7 (opening hours 24 hours each day and 7 days a week) to be convenient for everyone at any time.¹⁴ In the Federal Republic of Germany the law governing the hours of trading was federal law since 1956.¹⁵ For about twenty years there was no substantial change but only a few adjustments leading among others to moderate increase of opening hours as shown in table 1.

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Table 1: General shop opening hours in Germany between 1989 and 2003^{16 17 18}

Only after the first big German federalism reform had happened in 2006¹⁹ which led to several changes in the Basic Law for the Federal Republic of Germany, the devolution of certain legal powers to the federal states cleared the way for more pluralism and also for modification and extension of shop opening hours.²⁰ Since then in Germany the federal states can decide on the opening hours of stores in their state. Only Bavaria did not yet make use of this possibility and still adopts federal law.²¹ Throughout the sixteen states of Germany the laws for store opening hours differ. The appendices 1 to 6 show the federal states, their opening hour law names, the general opening hours and the main exceptions in detail. A short synopsis of the general opening hours shown in appendices 1 to 6 leads to the following figure 10:

Abbildung in dieser Leseprobe nicht enthalten

Figure 10: Opening hours by federal states - synopsis of the results of appendices 1 to 6

Sources: Appendices 1 to 6.

3.1.4 Potential C-Store Customers by Demography and Behaviour

For the implementation of a, for Germany relatively new, convenience retail store concept it is necessary to look at present and possible future customers. Finding out what possible customer types are, defining customer demographics and determining their needs and behaviour are among the most important aspects that need to be thought of before starting a new type of store at a certain place. The customers that mainly buy in convenience stores can be segmented into different groups of buyers. These groups are:²²

- Customers out of one or two person households
- Customers with multiple jobs and not a lot of time
- Travellers or passers
- People who forgot to buy something and now need it
- People who like to stay awake long or work in the night
- Impulse buyers

As shown above customers who buy in convenience stores use the convenience offered to get products fast, at all times and when they feel like buying something which they did not necessarily need.

3.1.4.1 Customer Demographics

Customer demographics are the characteristics of customers such as age, race and gender. For companies it is important to know these types of characteristics so they can offer the best products and services for attracting and keeping customers. For the German market the author has not found any actual comprehensive studies regarding convenience stores customer demographics. As an alternative, therefore some findings from a comparable study from the USA²³ are presented. These findings can be used approximately as a

preliminary basis for the implementation of a convenience store concept in Germany. In the following the customer demographics overview of this study will be shown:

- Gender:
- Six in every ten convenience store customers are male
- Only four are female
- Age:
- 4.4% of convenience store shoppers are under 18
- 6.9% of convenience store shoppers are 18-20
- 25.2% of convenience store shoppers are 21-29
- 22.2% of convenience store shoppers are 30-39
- 19.2% of convenience store shoppers are 40-49
- 22.2% of convenience store shoppers are 50 and above
- Income:
- 22.7% of all customers make under $20K a year
- 16.4% of all customers make $20K-$29.9K a year
- 18.8% of all customers make $30K-$39.9K a year
- 18.9% of all customers make $40K-$49.9K a year
- 14.4% of all customers make $50K-$79.9K a year
- 4.8% of all customers make $80K-$99.9K a year
- 4.0% of all customers make $100K and more a year

An overview over some elder studies about the German market does not

conflict with the findings for USA²⁴ and adds the following interesting aspects for a complete characterization of typical convenience store customers:²⁵

- Young 1-2 person households,
- Old single seniors,
- Time needing young families.

A correlation is stated, saying the younger a customer and the smaller the size of his household, the more distinct his convenience is.²⁶ Figure 11 shows an increasing percentage of single-person households in Germany leading to the expextation of tendentially growing importance of convenience stores.

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Figure 11: German household size in % from 1991 to 2016

Source: Own presentation using data from DSTATIS STATISTISCHES BUNDESAMT, 2017. Table 12211-0102 Privathaushalte: Deutschland, Jahre, Haushaltsgröße [online]. [Accessed on: 19/12/2017]. Available under: https://www-genesis.destatis.de/genesis/online/data;jsessionid= 262A265C0C0F9599B06DEBAA9B0B8C1D.tomcat_GO_2_1?operation=abruftabelleAbrufen&s electionname=12211-0102&levelindex=1&levelid=1513646119754&index=1.

3.1.4.2 Customer Mobility Types and their Behaviour

Another interesting German study²⁷ focuses solely upon mobility types and their on the go-supply with food or beverages. In the study two groups of mobility types are defined:²⁸

a) Labour mobility types

Five segments (percentages of the German working population in brackets) were derived by statistical analysis methods to describe mobility behaviour during a standard workweek:

- Well educated users of public passenger services (19 %),
- people, who live close to their place of employment (17 %),
- experience-oriented commuters (22 %),
- small-town car-purists (18 %) and
- province car-impelled people (24 %).

b) Leisure time mobility types

Five segments (percentages of the German population in brackets) were derived by statistical analysis methods to describe mobility behavior during leisure time and weekends:

- Agile car-couples (20 %),
- Retired silver-homies including housewifes (23 %),
- Single users of public passenger services (19 %),
- Nest-building mothers (17 %) and
- Rural inhabitants (20 %).

These groups are each analysed in detail, described by and laying focus on the following terms and key figures shown in table 2:

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Table 2: Terms and key figures used to analyse mobility types and their behaviour

Source: Own presentation using information from COMPETENCE CENTER FOR ON-THE-GO CONSUMPTION, 2013. Geschmackssache [online]. Mobilitätstypen und deren Unterwegsversorgung. [Accessed on: 17/12/2017]. PDF, p. 43. Available under: http://www.cc- otgc.com/cc/media/content/documents/studien/Broschuere_zur_Convenience-Studie.pdf.

The following tables give an overview over some main results. While table 3 deals with labour mobility types, table 4 shows the equivalent outcome for leisure time mobility types of consumers on the go.

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Table 3: Analysis results for labor mobility types of consumers

Source: Own presentation using data from COMPETENCE CENTER FOR ON-THE-GO

CONSUMPTION, 2013. Geschmackssache [online]. Mobilitätstypen und deren

Unterwegsversorgung. [Accessed on: 17/12/2017]. PDF, p. 38. Available under: http://www.cc- otgc.com/cc/media/content/documents/studien/Broschuere_zur_Convenience-Studie.pdf.

Abbildung in dieser Leseprobe nicht enthalten

Table 4: Analysis results for leisure time mobility types of consumers

Source: Own presentation using data from COMPETENCE CENTER FOR ON-THE-GO

CONSUMPTION, 2013. Geschmackssache [online]. Mobilitätstypen und deren

Unterwegsversorgung. [Accessed on: 17/12/2017]. PDF, p. 39. Available under: http://www.cc- otgc.com/cc/media/content/documents/studien/Broschuere_zur_Convenience-Studie.pdf.

These results were achieved by using different methods of raising and

analysing appropriate research data, such as interviewing experts, focus

groups, representative consumers and retailers as well as local visitations.²⁹

3.1.5 Competition

Knowing about possible competition is very important before opening a store and especially opening a store with a relatively new concept for the German market. Evaluating the competition beforehand is crucial for the success or the failure of a business. Competing companies are everywhere and compared to a concept such as convenience stores already well established in Germany and the German market. Thus, it is necessary to find ways of handling the competition and gain competitive advantages to sustain on the market. The next points will cover direct competitive companies and businesses and indirect ones.

3.1.5.1 Direct Competition

The direct competition are companies and businesses which are in some ways similar to convenience stores and are located relatively close to a possible store (In this work they will be called direct competitors). The types of stores which fall into this category are:³⁰

- Gas stations
- “Tante Emma”-stores
- Supermarkets
- “Kiosk”-stores
- Bakeries
- Butcheries

These types of businesses are already well established in the German market and in the German society. Competing against these businesses as a for Germany new type of retailer will definitely be a difficulty which should be considered.

3.1.5.2 Indirect Competition

Indirect competitors are companies and businesses which are not necessarily close and in the area but have a wide range of selling their products through delivery. Possible customers might find it more convenient to order goods from home and get a direct and fast delivery than going to a convenience store which is close by. Convenience stores must therefore offer services and prices which are competitive against these indirect competitors. An example for such a competitor is “Amazon” with its new service “Amazon Prime Now” that delivers a wide range of products in one hour after ordering directly to the customer’s house.³¹

3.2 Primarily Internal Factors

The internal factors covered in this bachelor thesis are, location, products, real estate, logistics, services and marketing. Internal factors are factors which cannot be directly influenced by the competition. A successful implementation of a convenience store in the German market is only possible if the internal factors are well planned and executed.

3.2.1 Location

One of the first steps of planning before a store can be established is to find a suitable location for the store. The location is one of the most important factors for a future success or a future failure of a store. There are a few steps of location choosing which result, if suitable, in settling in a certain location. These steps are:

1. Evaluating trading areas

“A trading area is the geographical area from which customers are drawn.”³² Trading areas consist of primary, secondary and fringe areas. The bigger the distance between the store and possible customers the less likely they are going to buy in this store. The shape and the size of every trading area depends on the following factors:³³

- Store size
- Store type
- Housing patterns
- Competitor locations  Travel time
- Traffic barriers
- Media availability

Figure 12 shows an example of a trading area with the three segments. The black dots are there to represent the spread of customers that are willing to buy at the store in the center.

Abbildung in dieser Leseprobe nicht enthalten

Figure 12: The segments of a trading area

Source: IN SLIDE SHARE, 2011. Distribution Channels MKTG 1058 LECTURE TWO [online]. Market Selection & Location Analysis (Chapter 7). 19/01/2011. [Accessed on: 23/01/2018]. Slide 73. Available under: https://www.slideshare.net/DCAdvisor/dc- lecture-two-market-selection-and-location-analysis.

It is very common among retailers to use geographic information systems (GIS).³⁴ This type of software combines digitised maps with collected data of the area and the people living in it to show possible trading areas. The more data is collected through surveys or observation and the more accurate the collected data is the more precise is the shown trade area in the GIS software. Therefore, it is important to collect as much data as possible. Public data of population and geographic characteristics as well as infrastructure and public transport can be used for a more precise trading are delineating. This type of program also shows a possible overlap with other already existing stores and competitors. In chapter 4.1.1 and 4.1.2 some empiric results based on geographic information systems are shown.

There are two approved conventional methods, which help define trade areas: Reilly’s law and Huff’s law.³⁵ Reilly’s law relates the distance between two cities to their individual population to show where the breaking point is which means after which distance to a city a customer is more likely to buy in the other city. Reilly’s law is not very accurate since it only takes the population size and the distance of two cities into account and it assumes that both populations are homogenous. Other factors such as natural borders or a possible lack of infrastructure are not considered.³⁶ Figure 13 shows Reilly’s law and an example of how to use it.

Abbildung in dieser Leseprobe nicht enthalten

Figure 13: Reilly’s law

Source: PENNSTATE COLLEGE OF EARTH AND MINERAL SCIENCES. The Law of Retail Gravitation [online]. PennState College of Earth and Mineral Sciences. [Accessed on: 23/01/2018]. Available under: https://www.e- education.psu.edu/geog597i_02/node/678.

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¹ NACS, 2017. How convenience stores work and their contribution to communities [online]. NACS, July 2017 [Accessed on: 17/12/2017]. PDF, p.11. Available under:

http://www.nacsonline.com/YourBusiness/Refresh/Documents/How-Stores-Work.pdf.

² Cf. NACS, 2017, pp. 8, 11.

³ See ZENTES, Dr. Joachim, Dr. Bernhard SWOBODA and Dr. Thomas FOSCHT, 2012. Handelsmanagement. 3rd edition, Munich: Verlag Franz Vahlen GmbH, p. 342. ISBN 978-3- 8006-4265-6.

⁴ Cf. ZENTES, Dr. Joachim and others, 2012, p. 342.

⁵ Cf. ZENTES, Dr. Joachim and others, 2012, p. 342.

⁶ See REWE, 2016. Aral und REWE starten langfristige Kooperation im Shopgeschäft [online]. Pilotprojekt an zehn Tankstellen zeigt hohe Kundenakzeptanz und ein deutliches Umsatzplus. REWE, 02/03/2016 [Accessed on: 18/01/2018]. Available under: https://presse.rewe.de/artikel/aral_und_rewe_starten_langfristige_kooperation_im_shopgescha eft/.

⁷ See AUER, Sarah and Roman KOIDL, 1997. Convenience Stores: Handelsform der Zukunft. 1st edition. Frankfurt am Main: Deutscher Fachverlag, p. 85. ISBN 3-87150-492-0.

⁸ See BUSINESS DICTIONARY [online]. [Accessed on: 14/11/2017]. Available under: http://www.businessdictionary.com/definition/external-factors.html.

⁹ See BUNDESANSTALT FÜR STRASSENWESEN, 2016. Automatische Zählstellen auf Autobahnen und Bundesstraßen [online]. [Accessed on: 16/12/2017]. Available under http://www.bast.de/DE/Verkehrstechnik/Fachthemen/v2-verkehrszaehlung/zaehl_node.html.

¹⁰ See BAYERISCHES STAATSMINISTERIUM DES INNERN,FÜR BAU UND VERKEHR, 2016. Übersichtskarte Dauerzählstellen und Verkehrsbeeinflussungsanlagen (VBA) 2016 [online]. [Accessed on: 16/12/2017]. PDF. Available under: https://www.baysis.bayern.de/web/content/verkehrsdaten/dauerzaehlstellen.aspx.

¹¹ See BAYERISCHES STAATSMINISTERIUM DES INNERN,FÜR BAU UND VERKEHR, Kennwerte und Karten [online]. [Accessed on: 16/12/2017]. Available under: https://www.baysis.bayern.de/web/content/verkehrsdaten/SVZ/Default.aspx.

¹² See NASA, 2017. Global Positioning System [online]. Thuy Mai, 07/08/2017 [Accessed on: 20/01/2018]. Available under: https://www.nasa.gov/directorates/heo/scan/communications/policy/GPS.html.

¹³ See CHIP, 2017. Google Maps als Navi: Ein Vorteil lässt der Konkurrenz (fast) keine Chance [online]. Kim Berkemeyer, 09/11/2017 [Accesssed on: 20/01/2018. Available under: http://www.chip.de/news/Google-Maps-Deshalb-kennt-das-Navi-den-Verkehr-besser-als-alle- anderen_99347317.html.

¹⁴ See CLIFFORD, Guy, 1994. The Retail Development Process - Location, property and planning. New York: Rutledge, p. 141. ISBN 0-415-07504-1.

¹⁵ See BUNDESANZEIGER VERLAG, 1956. Bundesgesetzblatt No. 50, 1956 [online]. Gesetz über den Ladeschluß vom 28. November 1956. [Accessed on: 16/12/2017]. PDF. Available under: http://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl156s0875 .pdf.

¹⁶ See BUNDESANZEIGER VERLAG, 1989. Bundesgesetzblatt No. 35, 1989 [online]. Gesetz zur Einführung eines Dienstleistungsabends vom 10.07.1989. [Accessed on: 16/12/2017]. PDF. Available under: http://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl189s1382 .pdf.

¹⁷ See BUNDESANZEIGER VERLAG, 1996. Bundesgesetzblatt No. 40, 1996 [online]. Gesetz zur Änderung des Gesetzes über den Ladenschluß und zur Neuregelung der Arbeitszeit in Bäckereien und Konditoreien vom 30.07.1996. [Accessed on: 16/12/2017]. PDF. Available under: http://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl196s1186 .pdf.

¹⁸ See BUNDESANZEIGER VERLAG, 2003. Bundesgesetzblatt No. 22, 2003 [online]. Bekanntmachung der Neufassung des Gesetzes über den Ladenschluss vom 02.06.2003. [Accessed on: 16/12/2017]. PDF. Available under: http://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl103s0744 .pdf.

¹⁹ See BUNDESANZEIGER VERLAG, 2006. Bundesgesetzblatt No. 41, 2006 [online]. Gesetz zur Änderung des Grundgesetzes (Artikel 22, 23, 33, 52, 72, 73, 74, 74a, 75, 84, 85, 87c, 91a, 91b, 93, 98, 104a, 104b, 105, 107, 109, 125a, 125b, 125c, 143c) vom 28.08.2006. [Accessed on: 16/12/2017]. PDF. Available under: http://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl106s2034 .pdf.

²⁰ See DEUTSCHER BUNDESTAG, 2007. Föderalismusreform und Grundgesetz [online]. [Accessed on: 18/11/2017]. PDF, p. 9, Artikel 74. Available under: https://www.btg- bestellservice.de/pdf/40140600.pdf.

²¹ See DEUTSCHER BUNDESTAG, 2009. Auswirkungen der Föderalismusreform I [online]. [Accessed on: 17/12/2017]. PDF, p. 21. Available under: https://www.bundestag.de/blob/422950/69afcd55ff349d7005103a402efcab6c/wd-3-255-09-pdf- data.pdf.

²² See EGGERT, Ulrich, 1998. Der Handel im 21. Jahrhundert. Düsseldorf: Metropolitan Verlag, p. 147. ISBN 3-89623-129-4.

²³ See VACCA, Kelley, 2013. Convenience Stores [online]. Keep the Core; Appeal to More. Chicago: Information Resources, Inc. (IRI) [Accessed on: 22/11/2017]. PDF, p. 6. Available under: https://www.iriworldwide.com/iri/media/iri- clients/T_T%20May%202013%20Convenience%20Stores%2006042013.pdf.

²⁴ See SCHMITT, Pascal, 2010. Megatrend Convenience: Eine nachfrageorientierte Potentialanalyse im Frühstückslieferdienst am Beispiel Frankfurt a.M. [online]. Trierer Arbeitsberichte zur Stadt- und Wirtschaftsgeographie 4. Trier: Prof. Dr. Ulrike Sailer [Accessed on: 18/01/2018]. PDF, pp. 8-11. Available under: https://www.uni- trier.de/fileadmin/fb6/prof/KUR/TASW_4_Megatrend_Convenience.pdf.

²⁵ Cf. SCHMITT, Pascal, 2010, p.11.

²⁶ Cf. SCHMITT, Pascal, 2010, p.9.

²⁷ See COMPETENCE CENTER FOR ON-THE-GO CONSUMPTION, 2013. Geschmackssache [online]. Mobilitätstypen und deren Unterwegsversorgung. [Accessed on: 17/12/2017]. PDF. Available under: http://www.cc- otgc.com/cc/media/content/documents/studien/Broschuere_zur_Convenience-Studie.pdf.

²⁸ Cf. COMPETENCE CENTER FOR ON-THE-GO CONSUMPTION, 2013, pp. 8-9.

²⁹ Cf. COMPETENCE CENTER FOR ON-THE-GO CONSUMPTION, 2013, p. 39.

³⁰ Cf. ZENTES, Dr. Joachim and others, 2012, p. 342.

³¹ See OLIVER WYMAN, 2016. Angriff auf den deutschen Lebensmitteleinzelhandel [online]. Munich: OLIVER WYMAN [Accessed on: 22/11/2017]. PDF. Available under: http://www.oliverwyman.de/content/dam/oliver-wyman/europe/germany/de/who-we-are/press- releases/2016/201610_PM_Fresh.pdf.

³² BERMAN, Barry and Joel R. EVANS, 2012. Retail Management: A Strategic Approach. 12th edition. Harlow: Pearson, p. 279. ISBN 978-0-273-76856-2.

³³ Cf. BERMAN, Barry and Joel R. EVANS, 2012, p. 279.

³⁴ Cf. BERMAN, Barry and Joel R. EVANS, 2012, p. 279.

³⁵ Cf. BERMAN, Barry and Joel R. EVANS, 2012, p. 279.

³⁶ See PENNSTATE COLLEGE OF EARTH AND MINERAL SCIENCES. The Law of Retail Gravitation [online]. PennState College of Earth and Mineral Sciences. [Accessed on: 23/01/2018]. Available under: https://www.e-education.psu.edu/geog597i_02/node/678.