Lionel Souque Has 200 AI Projects Running. He Still Thinks Retail Is a Human Business.

There is a temptation, at a congress dominated by artificial intelligence, to believe that technology is the answer to everything. Lionel Souque, CEO of REWE Group, spent his time on stage at the World Retail Congress gently but persistently pushing back against that idea.

"We remain a business done by people, for people," he told the audience. "This is very important."

That framing set the tone for a wide-ranging address that moved from geopolitics to grocery margins, from autonomous delivery vehicles to hyper-personalisation, and from the particular challenges of the German market to the universal principles Souque believes will define retail success for the next decade.

A Milestone in a Difficult Market

Souque opened with a number that would have seemed ambitious even in calmer times. REWE Group crossed the 100 billion euro revenue threshold for the first time in 2025, reaching 100.4 billion euros in total external sales across its 21 European countries. The group employs 380,000 people and operates more than 12,000 stores. It ranks second in European food retail and third in tourism.

"When I say 100 billion, it sounds easy," Souque said. "But it means you have to sell every day 300 million euros of bananas, Red Bulls, Coca-Cola, and potatoes. So it's a lot of work."

The achievement matters more for the context in which it was delivered. Germany, which generates around two-thirds of REWE's total revenue, has been in structural difficulty since 2023. GDP has declined. The country's two flagship industries, chemicals and automotive, are under sustained pressure. Energy costs and labour costs are high. Consumer confidence has been fragile.

The German grocery market adds its own layer of intensity. The largest players, EDEKA with its discount arm Netto, REWE Group with Penny, the Schwarz Group with Kaufland and Lidl, and Aldi Nord and Aldi Süd, together hold the lion's share of the market, with Souque estimating their combined weight at more than 80%. Discounters alone, he said, account for more than 40% of grocery sales, roughly double the share seen in most other European countries. German consumers, Souque noted with good humour, have high expectations for quality and service but remain deeply price-sensitive and are comfortable shopping across multiple retailers in a single week.

"They go to Aldi on Mondays, to REWE on Wednesdays, and to Kaufland on Fridays if there is a better promotion," he said. "That is quite typical for Germany."

Digital Transformation as a Strategic Priority

Seven years ago, REWE Group defined seven strategic priorities it would pursue consistently across all its business units and countries. While the solutions differ between a discount grocer in Germany and a tourist operator in Austria, the priorities themselves remain the same. Among them, digital transformation sits as one of the group's defining commitments.

Souque is clear-eyed about the economics. E-commerce in German food retail remains unprofitable after more than a decade of investment. Margins are thin, transport costs are high, and the infrastructure required to make online grocery work at scale continues to demand significant capital. "After ten years, we still don't earn money with it," he said.

But the strategic logic holds. According to Souque, REWE's own data shows that a customer who shops exclusively in store and then begins ordering online increases their total spend across the REWE ecosystem by more than 30%. The two channels reinforce each other in ways that justify continued investment even without short-term profitability.

The competitive dimension is also real. When Amazon announced it would reshape German food retail a decade ago, REWE chose to invest rather than cede the space. Amazon has since retreated from grocery delivery in Germany, but Souque was careful not to dismiss the threat permanently. "We must not underestimate Amazon," he said. "They are a huge company with very good people. Perhaps one day they will come back."

Testing the Technologies That Might Define the Next Decade

On last-mile delivery, REWE is running live tests with fully autonomous vehicles in two German cities. The regulatory journey has been characteristically German in its caution. Initial approvals in Hamburg limited autonomous vehicles to a six-kilometre radius and required a human attendant to follow on foot. Speed limits have since increased to 30 kilometres per hour and range restrictions have relaxed, making the economics more viable, if not yet fully resolved.

Beyond delivery, REWE is experimenting with six distinct new store formats across Germany, Romania, and Lithuania, ranging from very small to very large, from technology-intensive to near-conventional. The approach is deliberately experimental. Souque does not expect most of them to succeed. "If only one or two are successful and we can implement them in the future, it will have been a good thing," he said.

Three AI Projects Already Delivering Results

With more than 200 active AI projects across the REWE Group's business units and countries, Souque was selective about which to highlight. He focused on three that are already proving effective specifically within REWE's German supermarket business.

The first is space optimisation. REWE has built a tool that calculates the ideal space allocation for any store format, new or existing. For a 1,000-square-metre supermarket, the system can determine that fruit and vegetables should occupy 200 square metres, while pasta warrants 13 metres of shelf space. Those are not guesses or averages. They are calculated outputs based on the specific store's characteristics and commercial context.

The second goes one level deeper. Once the total space for a category is defined, the system determines exactly which products should occupy it. In Berlin alone, REWE operates 178 supermarkets, and not one carries an identical assortment. The tool uses location data, local demographics, shopper behaviour, proximity to competitors, and the presence of specific communities to shape the right selection for each individual store. A neighbourhood with a large Polish community gets a different pasta selection from one without. "There is not one store that has the same assortment as another in Berlin," Souque said.

The third project is hyper-personalisation, built on REWE's new loyalty programme, which launched in Germany in December 2024. Within just a few months of launch, more than 11 million customers had registered, a figure that Souque said far exceeded the company's expectations. That scale of first-party data is now being used to identify which promotions and coupons are genuinely relevant to each individual customer and serve them through the REWE app.

The contrast with traditional mass-market promotion is striking. The old approach, a front-page leaflet featuring pet food sent to all customers, reached 90% of shoppers who had no interest in it. The new approach targets each customer with offers connected to what they actually buy. "If you have a cat at home, you don't need a promotion for dogs," Souque said. "This is clear. But before, we made big leaflets."

The goal is not simply efficiency. It is loyalty. By making every promotional interaction relevant, REWE aims to increase visit frequency and deepen its relationship with customers who would otherwise continue rotating across multiple retailers.

The Principles That Do Not Change

For all the talk of technology, autonomous vehicles, and machine learning, Souque closed with an observation that has defined his thinking across thirty years in the industry.

Three things, he argued, are the constants of retail success. They were true three decades ago, they are true now, and he expects they will still be true a decade from now: the goods, the customers, and the employees. Get those three right, consistently, and the rest tends to follow.

AI, in his view, is a powerful tool for getting each of those three things right more precisely, more efficiently, and at greater scale. But it is a tool. The goal remains what it has always been.

"In retail, whether it is fashion, food, or DIY, it is always the same," he said. "We are a business done by people, for people."

That may be the most important thing said at the Congress about artificial intelligence: not what it can do, but what it is for.