(Bloomberg) -- For many people, a particularly vexing aspect of life in Germany is that it’s nearly impossible to buy groceries on Sundays or public holidays. Since 1956, national law has dictated that almost every store close on those days, and although federal states can now decide their own rules, most have held firm to the idea that workers and shoppers need a mandated day off.
Recently, however, automated mini-markets have convinced several states to make an exception. These shops, most of which are operated by the German supermarket chain tegut... gute Lebensmittel GmbH & Co. KG, are just over three times the size of a parking spot, open 24/7, can be accessed via an app or a bank card, and offer self-checkout. All without a salesperson present.
As plans to open more such stores move ahead — and as retailers in other parts of the world experiment with AI-based supermarkets — the fate of Sunday shopping in Germany, as well as other European countries with similar policies, is likely to be influenced by automated options.
In the last four years, tegut has opened 40 so-called tegut teos – small wooden containers with plant-covered roofs and mini-markets inside – in three states. Each offers around 950 items, from basics such as toothbrushes and sauces to perishables including vegetables and steaks.
Laws governing these shops vary from state to state. While Baden-Wuerttemberg looks the other way when it comes to teos’ opening hours, Hesse – where tegut is headquartered – amended its laws last month to allow mini-markets to operate around-the-clock, including on Sundays and holidays. Bavaria is currently adapting its legislation to do the same.
“We need to get the laws changed in every federal state to get out of the legal gray area,” Thomas Staeb, the project manager overseeing all teos, said in an interview at a location in Hesse.
Getting states to reconsider the store closure law hasn’t been easy. Last December, after dozens of teos had already opened in Hesse, the state court issued a ruling banning micro-markets from operating on Sundays and holidays. Staeb launched a one-man campaign to get the law changed – he couldn’t remember “how many times I went in the front door of the ministry, was kicked out and went back in through the back door” – before finally succeeding in July.
According to the Federal Research Institute for Rural Areas, about half of Germany’s rural population lacks access to groceries within walking distance. This is one reason why Staeb, among others, believes micro-markets fill an important niche. They can improve access to essential goods as well as “the equality of living conditions,” the German Trade Association wrote in an email.
“Such markets could help revitalize local economies,” noted Dirk Binding, head of digital economy, infrastructure, and regional policy at the German Chamber of Industry and Commerce. “If people can do their daily shopping locally, more purchasing power remains in the region, which could also attract other small stores and services in the long term.”
The extra operating days have also benefited tegut. According to Staeb, the teos make about 30% of their weekly revenue on Sundays. Overhead costs are also low, with each store requiring around 25 hours of human labor a week for tasks such as restocking and cleaning.
Leading retail associations contacted by Bloomberg said that they didn’t have enough data to estimate the impact of micro-markets on Germany’s economy, but among rival retailers, the concept has not been warmly received. Five supermarket chains surveyed by Bloomberg stated that they do not operate automated stores. Lidl, the best-known brand of the Schwartz Group, one of the country’s biggest supermarket companies, said in an e-mailed statement: “We value direct customer contact. For this reason, Lidl does not currently have any stores in Germany without staff.”
That may not be the case forever. Rewe Markt GmbH is launching several test AI supermarkets in Germany, and tegut has also opened its first such store in Darmstadt. In those stores, cameras track customers and scales on the shelves keep tabs on what products are taken, automatically debiting the corresponding costs from a shopper’s account.
The futuristic — or dystopian, depending on one’s view — nature of automated shopping has raised concerns about data protection. Oliver Buttler, who heads the Telecommunications, Internet and Consumer Law Department at the consumer advice center in Baden-Württemberg, a non-profit watchdog, took a look at teo’s data protection policy, which requires that customer information be anonymized and deleted after a few days. He noted some potential areas of concern, but overall, didn’t find any red flags. According to the data protection authority in Hesse, no complaints had been filed about automated mini-markets.
While Staeb hopes to have around 300 teo stores across Germany within two decades, not even he thinks that automated stores will replace their human-staffed counterparts. Instead, he said, they’ll likely act as supplements.
For now, he’s focused on troubleshooting issues that arise with the new model, whether legal or logistical. One early concern was whether older customers would take to the technology. He got his answer when tegut opened a store at a retirement home in Munich: “an 84-year-old granny came in, proudly wearing her Apple watch, and asked me if she could pay with it.”
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