Kaufland will be stopping its online grocery service in Germany.
Concerns over profitability
Having launched its grocery online site in Germany in 2016, Kaufland has announced it will be withdrawing the service, following concerns around costs and the lack of potential for future profitability. The service is currently offered in Berlin and there were plans to extend it to Hamburg. However, in November the retailer announced it wouldn't be expanded to Hamburg and has now confirmed the service will be stopped entirely.
Online channel challenging in Germany
The move reflects the difficulty that discount retailers are having in making online grocery financially viable in Germany, with Lidl announcing last month they would also be withdrawing from the online grocery market for the time being. On the other hand, Edeka has recently announced that its online offer, through partner Bringmeister, will be adding additional services such as one hour delivery slots in Munich, made possible by the opening of a new logistics centre near to the city. So whilst the channel remains challenging, some retailers are continuing to develop their offers and increase the services offered.
Expansion to Netherlands blocked
Local sources reported that Kaufland had been planning to open its first store in the Netherlands, in the area of Deventer. However, permission by the council has been denied, due to concerns of the impact to other local businesses. This is not the only international entry Kaufland has considered. It recently purchased a second site in Melbourne in Australia, ahead of its planned entry into the country.