Study by the EHI Retail Institute on the situation in Germany in 2024

12/09/2024

by Julia Pott

A person with blue gloves prepares a salad bar; Copyright: Adobe Stock

Competition in the food and gastro industry is in full swing. Between discounters that score points with low prices and restaurants that offer a culinary experience, many food retailers are trying to position themselves with a food service offering. And they are increasingly succeeding, as the latest study by the EHI Retail Institute on the state of in-store gastronomy in Germany in 2024 proves.

We have taken a look at selected results of the study, for which a survey of 32 (‘gastronomy’) executives in retail companies and shopping centres with over 12,000 locations was conducted in addition to statistical data.

In-store gastronomy is the continuous provision of food and beverage services and ready-to-eat meals that are directly or conceptually related to retail activities.

Retailers offer a wide range of in-store gastronomy formats, from bakeries, cafés or snack bars in the checkout area to fast food services such as food trucks or hot counters. In addition to convenience offerings in refrigerated shelves or salad bars, some retailers or shopping centres operate restaurants or food courts, while others offer delivery services.

An elegantly laid table in a stylish restaurant; Copyright: Adobe Stock

Growth in the in-store gastronomy sector

Retailers in Germany recorded strong sales growth with their food service offerings in 2023. With an increase of 15.9 per cent compared to the previous year, revenue reached 11.7 billion euros. For the current year, respondents expect an average increase in turnover of 2.8 per cent. In 2020 and 2021, catering revenue fell significantly due to the coronavirus pandemic. While the pre-pandemic level was reached again in 2022, a significant increase in turnover was recorded in 2023 compared to previous years.

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The food retail sector relies heavily on food services, which account for a very large share of the business model with over 59 per cent of total sales. Shopping centres (19.7 percent) and petrol stations (10.1 percent) follow at a considerable distance.

According to the respondents, the top 3 success factors are friendly staff, good product quality and value for money. In fact, the study concludes that consumers have become more price-sensitive. Compared to previous years, they say they pay more attention to price than quality. In-store gastronomy has a significant advantage over the rest of the out-of-home catering market due to its significantly lower prices. For salads and meat dishes, but also for sausage and pasta dishes, retailers can achieve price differences of up to 82 per cent.

Why do retailers run in-store gastronomy? What goals do they pursue with it?

Providers of food services in the retail sector hope to set themselves apart from the competition, make a profit and retain existing customers while attracting new ones. The image and visitor frequency are to be increased by offering a meeting place for people with a feel-good atmosphere (third place) and a supply function. The retailers also want to increase the length of time customers spend in the store.

Graphic: Why do retailers offer food services?; Copyright: EHI

32 retail companies with 12,110 shops were asked: What is the main motive or what are the most important goals pursued with In-store gastronomy? The figures show the percentage of respondents. Multiple answers were possible.
© EHI

According to the study, the average length of stay in the in-store gastronomic outlets of the companies surveyed was 20.5 minutes. At over 97 per cent, most visitors stay between 11-20 minutes. Only just under 3 per cent stay 21 minutes or longer.

Various fresh dishes; Copyright: Adobe Stock

Investments in in-store gastronomy

In view of these market developments and with a view to the future, the retailers are planning extensive investments over the next three years. Priority will be given to investing in catering technology, particularly in the areas of refrigeration, production and presentation. Retailers also want to invest in shop fitting and equipment – such as furniture, lighting and flooring – in order to increase customer comfort. Other key areas of investment include staff and training, coffee machines, checkout and self-checkout systems, ordering terminals and ventilation technology.

How will the future of in-store gastronomy be influenced by new technologies and AI? We spoke to one of the authors of the study, Olaf Hohmann, Head of Research in-store gastronomy at the EHI Retail Institute, to get some exciting predictions for the future of the food service industry.

Planned digitalisation measures in in-store gastronomy

The digitalisation of processes and data is another important investment area in in-store gastronomy. This includes digital receipts, customer cards, loyalty programmes or menus that can be accessed via the web or QR code. Investments in merchandise management, reporting and analysis capabilities and forecasting systems are also very important. Other areas of digitalisation include staff scheduling, social media presence, ordering processes and order terminals.

Graphic: Planned digitization measures in the food service industry; Copyright: EHI

30 retail companies with 12,110 shops were asked: Which areas in your production chain from ordering to delivery are digitalised or should be digitalised? The figures show the percentage of respondents. Multiple answers were possible.
© EHI

A chef prepares food in a food truck for a waiting customer.; Copyright: Adobe Stock

In-store gastronomy as a model for success?

In-store gastronomy in Germany recorded considerable success last year. With innovative concepts, convenience offerings and increasing digitalisation, it has managed to retain customers and gain competitive advantages. Nevertheless, restaurateurs face the challenge of finding and retaining qualified staff. Rising raw material and energy prices are also making profitability more difficult. However, with targeted investments and a range of products tailored to the needs of customers, in-store gastronomy can cater to the latest consumer trend, which favours experiences, leisure activities and gastronomy over material goods.

Many other survey results, data and findings on in-store gastronomy in Germany can be found in the EHI study. These include numerous topics such as the market situation, investment areas, product range, sustainability, personnel and challenges.