Vierlinden: No Halt in Expansion

Since the launch of two Vierlinden stores in April and September 2005, there has been no news of the Rewe initiative with purely organic supermarkets that at the time caused such a stir. The anniversary of the first launch was at the end of April.  Plans for future strategy have been ready for a while now, but Elke Rieckh, manager of Bio-Konzept GmbH, will not be hurried. “We need a solid foundation on which we can build a viable company one step at a time.” says the organic industry insider.

Picture: Elke Rieckh

She is the one who determines the strategy and pace of development of Bio-Konzept GmbH, founded by Rewe specifically for Vierlinden. She is convinced that organic growth is preferable to precipitous launches one after the other. At the opening of the first Vierlinden store last year, there was already talk of “cautious growth” to forestall speculation about a launch marathon by Rewe. “We are keen on sustainable growth. All areas of the business must keep up if we are to meet our responsibilities and our expectations”, says Elke Rieckh. Products have to be available in the right quality and, in particular, staff has to be trained in order to ensure a high level of advice can be given. “We want to create transparency and trust, and for that we need time, top quality goods and outstanding customer counselling.” With the entry of the discounters in the organic market, the next scandal is, in her opinion, pre-programmed.

Apparently, there was too little news about Bio-Konzept GmbH for some people, so they began to speculate about the reasons. If you believed the rumours, the new Rewe Board was not really so keen on organics. You could hear people saying at Biofach that the expansion programme for Vierlinden had been put on ice. Elke Rieckh emphatically rejects all of this: “Vierlinden will expand. Expansion has not been halted.” The timetable for new projects in 2006 and 2007 was coordinated in a number of discussions about strategy in the company. As a result, this year will see only one new Vierlinden store being opened. The final location for the  launch in the Autumn has not yet been finalised, but Frau Rieckh has indicated that it will be in North Rhine Westphalia. In 2007 as well, Bio-Konzept GmbH will focus on this federal state with at least three new stores.

Frank Morgenstern, Managing Diector of the “Für Sie” (“For You”) trade association Food - Non Food, assumed at the beginning of last year that there would be three new Rewe organic supermarkets in the first year, and after that the launch tempo would increase. “We are planning five stores in each of the next four years. If we are successful, it will be more; if not then fewer.” It was Rewe’s intention to start in North Rhine Westphalia and then go nationwide. The pace of expansion originally envisaged is obviously not going to happen. Frau Rieckh gives as reasons the need for quality and the shortage of suitable staff. No doubt, other reasons play a part. Success in the market cannot be predicted in detail, even where finance is not a problem and the concept has been worked out. This is what Bio-Konzept GmbH is having to appreciate with respect to Rewe.

Mrs. Rieckh is happy with the development of the two Vierlinden stores in Düsseldorf-Benrath and Köln-Braunsfeld, considering that they are not prime locations. However, the target turnover of four million euros for the Düsseldorf store was not achieved. The Rewe subsidiary Bio-Konzept GmbH invested about 1.5 million Euros in Vierlinden in 2005. More new stores are to be run by Rewe and for the time being not handed over to independent operators.

The first anniversary of the launch of Vierlinden in Düsseldorf-Benrath was duly celebrated on 27 and 28 April with 20 % off everything in the store. Elke Rieckh: “We were run off our feet. Our customers stocked up and treated themselves to products that they normally might not buy. Cosmetics, delicatessen products and fresh food were in great demand.” She added that the special days were seen both as presenting customers with a gift and advertising lines whose sales were slower. An example of the high level of demand was the turnover in the butcher’s department in the Benrath store, where over the two days more than 100 kg of chicken breast were sold. For Mrs. Rieckh, the 20 %-off strategy was a very worthwhile experience.