Renaissance of owner-managed shops

For some time it looked as though the independent specialist trade was leaving expansion to the chains. But those who were thought dead, eventually live longer. More and more frequently, experienced specialist retailers are investing in bigger retail space or are opening a second store. Two Frankfurt stores are good illustrations of the trend to a renaissance of owner-managed businesses. And they have a really good chance of success in fought-over locations like Frankfurt.
(Picture: Volker Ricard in front of the extensive wine range in Biomarkt Picard)
According to surveys carried out by Organic-Market.Info, the figures for expansion in 2009 reveal that the chains were once again the driving force: 52 % of 58 new specialist stores (25,500 m²) belonged to operators with five or more stores. The figures for 2007 were 55 % and 54 % respectively. According to the statistics compiled by Organic-Market.Info, there are around 550 organic specialist stores (200 – 400 m²) and organic supermarkets (from 400 m²).

After the launch of the first two organic supermarkets in Frankfurt, Alnatura in Bockenheim and Basic in Bornheim on 27 and 31 March 2003, closures began to occur among the old, small-scale shops. Matthias and Sebastian Paust from Grüneburger Bioladen estimate that about half of the specialist shops have closed for various reasons in recent years. Some were no doubt finished off by the competition of the chains. However, two old-established specialist stores in Frankfurt have re-invented themselves. Both Grüneburger Bioladen and Biomarkt Picard (formerly Rödelheimer Naturkostmarkt) moved to new premises and, with much larger retail space, they have created a new profile and have successfully created their own identity vis-à-vis the competitors. These are currently four Alnatura stores, three belonging to Basic and one to Denn’s, plus dm, tegut and the organic lines of conventional food retailers. Besides Grüneburger Biomarkt, Rödelheimer Markt and eight stores belonging to chains, there are today only six classic specialist stores in Frankfurt. (Picture: Basic opened almost at the same time as Alnatura. They were the first chain stores in Frankfurt and caused problems for the old-established shops)

Grüneburger Bioladen (formerly Grüneburger Naturkost) was founded by Matthias Paust ten years ago. In 2003, his younger brother Sebastian joined the business. In those days, their 55 m² were already rather restricting, but it was nearly another seven years before they found suitable premises nearby in the Westend district. In December 2009, the brothers moved into their new organic store (200 m² of retail space) just 400 metres from their old shop. The former DHL service station had been completely renovated by the landlord. (Picture on left: Ideal location: high footfall, affluent residential area, regular customers have stayed loyal)


Including technology and goods, the Pausts invested around 300,000 euros in the new business. The busy Grüneburgerweg is close to the town centre and, with its specialist shops and restaurants in an affluent residential area, it is an ideal location for the concept of the Paust brothers. Their concept includes lots of fresh food, a carefully crafted product range that also offers a variety of fine foods and specialities, and an inviting bistro. Six parking spaces in the yard mean you can do your bigger shop there too, including crates of drinks. (Picture from left: Sebastian and Matthias Paust take great pleasure in their store)

After the first organic supermarkets were opened, leading to a fall in turnover, Matthias and Sebastian Paust did not bury their heads in the sand but instead took retaliatory action. Their countermeasures were, at that time, developing core competencies, for example optimising the cheese counter and the fruit and vegetable department. Evidence of success in the old shop was fresh food accounting for 75 % of turnover and the reputation of having the best cheese counter in the city. They have transferred this good reputation acquired on 55 m² to their new store. Sebastian Paust sums it up: “It’s our love for all we have plus skilful staff that sets us apart.” Although the old shop had long ago reached its limits, when searching for new premises they refused to be put under pressure by the wave of openings carried out by the chains. However, they admit that, if a store had opened too close to them, things would probably have been different. With an eye to expansion, in 2005 they switched from the regional wholesaler Phönix to Weiling as their main wholesaler. (Picture: The proportion of fresh food in the new store is currently 60 – 65 %)

When the new premises, with three and a half times the space of the old shop, became a reality, they worked together with the business consultant Klaus Braun and the specialists from Weiling on a detailed concept. The old and new focus is fresh food of excellent quality that invites people to buy. “With 60 – 65 % of fresh food in our product range, we’re a fresh food store,” says Matthias Paust. He is also constantly on the lookout for special products, oils, specialities from Italy or artisan fine foods, for example from Berlin. The well stocked cheese counter (200 varieties, of which 50 are sheep and goat cheeses) plus a large selection of antipasti, sausage and meat (self-service) give the store its profile in the same way as the bistro (15 places) in the front window near the entrance. “It’s proving very popular, and we’re now planning an outside area under the lovely chestnut tree,” explains Sebastian Paust. (Picture: The cosmetics corner: small but exclusive and clearly laid out. Everyday products on sale here)

Since opening in December 2009, as the two brothers explain, they have finally got the space to present their ideas and to experiment. They have increased the product range from 2,000 to 4,000 items. The brothers attribute their success in setting themselves apart from the competition to the following factors: the coherent overall concept is important but also the personal touch and a 100 % customer-oriented service. “We’re striving to become the leaders in terms of quality, because leaders in terms of price is something we can’t be and don’t want to be,” stresses Sebastian Paust. “We plan to raise our turnover by 100 % in the first year,” he explains. The business plan was fulfilled long ago. “From the outset, we had a good feeling that expansion would pay,” adds Matthias Paust. He says that they have quickly moved on from the old shop. “We can hardly imagine now that we stuck it out in that little space for ten years.” (Picture: The cheese counter is one of the highlights of Grüneburger Bioladen)

Barbara and Volker Picard moved to new premises in January 2010. Just 100 m round the corner from their old shop, after 20 years, they have re-opened their Biomarkt Picard. They have increased their retail space from 125 m² to about 300 m². The new location on the main thoroughfare in the Rödelheim district (the main trunk road from the Taunus region) immediately proved to be a good choice, attracting 50 % new customers (about 300 per day). Wide windows allow you to see into a pretty bistro, and it invites people passing to step inside. Wondering whether to go in was yesterday – today many people in Rödelheim find their way to this well laid-out store. The catchment area extends beyond Frankfurt itself and into the Taunus area. In this part of the city there are many small households, teachers (international school), an established second generation of foreigners, large numbers of Asians and French people. Certainly enough actual and potential customers. (Picture: Barbara and Volker Picard have 20 years experience in the wholefood business)

Biomarkt Picard is a partner of both Dennree and Rapunzel. Barbara and Volker Picard have increased their stock from 4,000 to 6,000 articles, with the main focus on cheese (service counter), frozen food (8 m), convenience (10 m chilled counter), spices, teas (among others, loose Oasis), juices and cosmetics. (Picture: A balanced range in terms of price: entry price products as well as premium quality products)

The two owners report that the bistro area (15 places) near the entrance is now well established. Sweet delicacies and cakes come from the adjoining bakery counter, and the baking section supplies oven-fresh snacks. In general, the product range has balanced prices: “Our customers value choice and often choose a higher priced alternative in preference to an entry price product,” explains Volker Picard. He adds that quality is still appreciated, and people are prepared to pay for it. To promote brand products they organise tasting events at which Volker Picard sometimes plays with his band (Papas Finest Boogie Band). Around 80 % of goods come from Dennree. A customer card is now being introduced.

Before the move to the renovated former Schlecker store, these two experienced store owners sought the advice of Klaus Braun. They also took advantage of the advice of their main wholesaler Dennree regarding expansion and of their offer to supervise the project, including building work. When the Picards first thought about expansion, they made Dennree the main wholesaler for their Rödelheim wholefood store, so that they would have a strong partner by their side, also in respect of the activities of the chains. The regional wholesaler Phönix still supplies regional fresh food. The chains had little negative effect on the specialist store, and after three months they had overcome the decline in turnover. (Picture: The big selection of cheese is what customers want)

The shop owner couple were fully aware that retail area is not the be-all and end-all – you have to have something particular to offer your customers as well: “We rely on known, competent staff and our own presence in the store. The atmosphere has to be created by the owners.” Other important points are an uncomplicated ordering service that gives customers a one-stop-shop experience and the already mentioned events that underline the unique character of the store. (Picture: The extensive cosmetics department satisfies every desire)

The Picards invested around 300,000 euros in furnishings, technology and goods. This was made possible by a KfW loan, goods on credit from Dennree and a participation rights model that is managed by Gernot Meyer. 15 customers have become participants with up to five figure investments. The contract runs for seven years and every year a dividend of 3 – 6 % is paid, which is currently more lucrative than the interest rates paid by the banks. Three months after moving into the new building, the business plan has been achieved, and Barbara and Volker Picard are very pleased with their decision. “We ought to have done it earlier,” she says. They are going to celebrate their 20th anniversary together with all loyal and new customers in the autumn. (Picture: People like the new bistro. Products supplied by two bakers plus bakery goods from Schedel are much appreciated)