This article published October 2016. For latest news THIS MONTH'S ISSUE
NACS Insight’s Convenience Summit - Europe will lift the lid on the convenience retail market in Switzerland next year when the event convenes in Zurich and then London, 11-16 June 2017.
The shopper insights specialist him! international has researched the Swiss convenience retail market and found a thriving channel with opportunities for healthier, better-for-you options and food-on-the go.
When it comes to shopping for groceries, 75% of shoppers do a combination of larger weekly shops and smaller top-up shops, reports him! international. More than a fifth - 22% - of shoppers buy lunch-to-go once in a typical week and a similar number - 21% - buy a hot drink-to-go once in a typical week.
Swiss consumers are also fans of dining out too: nearly half - 47%- of shoppers eat dinner away from home once in a typical week, researchers found.
Convenience retailers are also meeting Swiss shoppers’ need for healthier products. Just 30% of shoppers do not believe their local convenience store/forecourts have enough healthier food options.
Stores are also rated for their customer service, him! international found, with forty per cent of shoppers agreeing with the following statement regarding petrol/convenience stores: “they have friendly and welcoming staff”.
Migrolino, the convenience retailer owned by Migros Cooperatives Federation, is Switzerland’s leading retailer. Here Fiona Briggs talks exclusively to Migrolino CEO Markus Laenzlinger about the retailer’s small store logistics initiative and its freshly made food offer. Laenzlinger will help to host Insight NACS store visits to Migrolino outlets during CSE 2017 in Zurich.
Migrolino is future proofing its business by investing in logistics and its freshly made food concept.
The business, which operates 302 stores, is also in expansionist mode with a target for 310 outlets by the end of 2016.
“That’s my goal,” asserts Migrolino CEO Markus Laenzlinger, ‘but it depends on the construction and if the local communities allow us to build new stores.”
Migrolino has edged significantly closer to its target in the last 12 months, however. In the second half of 2015 it signed a master franchise agreement with Piccadilly to operate around 35 petrol stations in the Italian speaking region of Switzerland.
“The contract has allowed me to expand to the whole Italian-speaking part of Switzerland, which is extremely nice because Italians like to shop whenever they want,” smiles Laenzlinger.
The forecourts benefit from extended opening times in what would normally be a restrictive market in terms of trading hours.
Spring 2016 also ushered in expansion with some 12-15 stores opened in the French and German-speaking regions of Switzerland.
As well as completing the refurbishment of the Piccadilly sites, Migrolino has also put its new small store logistics project to bed.
The company has invested 30m Swiss Francs in an automated logistics centre for its convenience operations, removing all manual processes from the equation.
It began the transformation with ambient lines and then moved onto chilled.
Laenzlinger reports the goal is for a 25% increase in efficiency. To date, it is recording a 10% improvement.
“Performance is suffering a little bit because before we did everything by hand and now it’s done by machine and it’s taking time to progress,” Laenzlinger says.
But the growth of the company warranted the move since the alternative was either expanding on the existing site or implementing a night shift. The pay back on the project, meanwhile, is anticipated at four years. “We decided to go this way and not implement another shift during the night because it’s not as efficient as a machine,” Laenzlinger reports. “There are many software tools behind this process, which is extremely intensive; but efficiency is not for free and now we are getting better and better.”
Migrolino is growing its ‘freshly made’ concept stores in tandem. The new convenience format was launched in September 2014. To date, there are around 20 locations, sited around main railways stations. The offer spans superfoods for health benefits, great flavour combinations for indulgent moments, seasonal offers for creativity and organic produce for sustainability. Products are made at least twice a day for freshness and include full nutritional information. The production area is on show for ultimate transparency and guarantees the offer is ‘made by hand’.
Laenzlinger reports the aim is to transfer all of those products to its petrol stations as well as to existing outlets in railway stations but with a fresh strategy - investment in a centralised kitchen to ensure production is consistent across the board.
Scheduled to come on stream in June 2017, Migrolino will be taking fresh food production in house to guarantee quality at all of its locations.
Product ranges will be transported to stores at night to deliver ultra fresh products including sandwiches, salads, muesli and fresh yogurt, fresh juices and fresh meals, which consumers can eat at home or in the Mirogolino restaurant, the next day.
The business is also hoping to reap synergies with the fresh products, which are already in its assortment, such as meat, charcuterie and cheeses, with the promise of ‘everyday freshness’.
And, instead of full service kitchens, finishing points will be introduced into stores for final product assembly and plating etc.
“It’s in order to keep the quality on the same level, otherwise we would be operating 10 kitchens with 10 different levels of quality and for Migrolino that’s a no-go for the future,” explains Laenzlinger.
Alongside quality, healthy eating is another watchword at Migrolino and it’s a trend that’s getting stronger and stronger, according to Laenzlinger.
“Every month that I don’t have my [centralised] kitchen, I’m losing out to fast food operators, who don’t care about those strengths or don’t respond fast enough and are set in their own ways,” he says.
Better for your products, including organic and vegan lines and those for allergy sufferers, are gaining momentum in Switzerland; so much so that Migrolino expects to generate 20% of its turnover from such products in the next two years.
Good animal welfare and ethical sourcing both have strong traction with Swiss consumers, Laenzlinger reports. They are also trends that chime well with the Migros Cooperatives organisation, which has been recognised for its ethical standards and has invested heavily in sustainable sourcing such as bananas and, more recently, horse meat [popular with French-speaking Swiss shoppers] with the establishment of a farm in Canada to rear animals and avoid unnecessary transportation.
“We take a lot out of the Migros philosophy,” says Laenzlinger.
As well as leading with sound ethics, Migrolino takes inspiration from world markets and competing convenience store operators.
“We are looking more to the UK and US and the trends that are coming from over there,” Laenzlinger reveals.
“Switzerland is responding to British eating habits with fresh ready meals, sandwiches and salads - people like the look and feel of these products and we like to have them on our shelves as well. As soon as we bring a new assortment here, people are responding immediately to it,” he says.
Migrolino looks to new packaging trends too. Laenzlinger says he rates Pret A Manger as best in class for ‘gastronomy’ and ‘fast food’ in this respect and Marks & Spencer Simply Food as the best store.
Migrolino will be helping to showcase the best of what Switzerland has to offer at the NACS Insight Convenience Summit - Europe 2017, which convenes in Zurich and London.
Laenzlinger plans to highlight new formats in and around Zurich station, including Mirgrolino; plus a new shopping and eating concept in Bern called Welle-7.
Laenzlinger, a previous delegate on NACS Insight retailer study tours, finds these kind of visits invaluable.
“I like to compare myself and my company with the best in the world and takeaway brilliant ideas and processes,” he says. “I like to be the best or in the circle of the best.
“I also enjoy spending time in discussions with colleagues, learning about the different life cycles such as tobacco, credit cards, sugar and fats; and to learn where other retailers are in the life cycle in order to hear the tiger because, when you see it, it’s too late!”
The IGD picked Switzerland’s Migros as a ‘stand out’ convenience retailer in Europe. Here’s what it thought about the chain:
“In 2012 Switzerland based Migros launched a new convenience concept, Migros Express. There are currently three stores located in busy commuter areas close to railway stations, enabling it to target commuters.
What makes them standout?
“Unlike Migros’s larger stores, Migros Express stores are open all week, including Sundays. Some stores also have longer opening hours.
“Self-service checkouts allow customers to scan their goods themselves, adding to the convenience appeal and helping the format deal with large numbers of shoppers at busy times of the day.
“The stores stock a range of hot and cold food-to-go options, but also offer many conventional supermarket products.
“The amount of fresh produce is larger than in many small convenience stores and is competitively priced to make the range appeal to shoppers.”
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