PENNY was founded in Cologne, Germany in 1973 and has grown into one of Germany's most widely distributed discount supermarket networks. As a Rewe Group subsidiary alongside REWE supermarkets, PENNY occupies the price-competitive discount segment of the German grocery market with over 2,150 stores nationwide.
For German independent grocery and discount retailers, PENNY provides a practical loyalty case study: a discount chain that uses digital loyalty tools to defend its price positioning against Aldi and Lidl competition.
How PENNY Retains its Customers
PENNY's digital loyalty strategy operates through three mechanisms:
Personalised coupon activation. The PENNY App generates weekly coupons based on each shopper's purchase history. A regular buyer of milk, eggs, and bread receives coupons for dairy, eggs, and bakery products; a frequent organic buyer receives organic-category coupons. The shopper activates chosen coupons before the visit and presents the app barcode at checkout. This personalised approach delivers relevant discounts rather than generic promotions, creating a higher perceived value for the app membership and stronger purchase intention on the specific products offered.
Member prices on rotating weekly products. Beyond personalised coupons, PENNY designates a selection of products each week as "Mitgliederpreis" (member prices) available to all app users. These member prices are visible in the app and on shelf labels, providing an immediate incentive to present the app at checkout even for shoppers who have not activated specific coupons. The combination of personalised coupons and universal member prices creates two distinct layers of app loyalty value that complement each other.
Rewe Group partner offers. PENNY App members can access selected partner offers from other Rewe Group brands and partner companies, creating a modest coalition loyalty dimension that extends the app's value beyond the PENNY shopping occasion. For German consumers who also shop at REWE supermarkets, the cross-group benefit provides additional reason to maintain the app membership and remain an active loyalty participant.
The German Discount Grocery Loyalty Context
Germany's discount grocery market is the most mature in Europe, with Aldi and Lidl having trained German consumers over five decades to expect the lowest possible prices without loyalty programme infrastructure. For a generation, German discount shoppers had no loyalty cards and no app engagement: they simply shopped at the cheapest store for each shopping trip.
The past five years have seen all major German grocery operators, including the discount segment, accelerate digital loyalty investment. PENNY, Netto, and even Lidl (with the Lidl Plus app) have recognised that an app-based loyalty layer can deliver category-targeted pricing benefits without the structural price reductions that would erode overall margin.
Three Lessons for German Independent Discount and Grocery Retailers
1. Use personalised coupons to compete on effective price, not shelf price. PENNY's most sophisticated loyalty mechanic is the personalised coupon that matches each shopper's regular basket. An independent German retailer that cannot reduce shelf prices to Aldi/Lidl levels can generate personalised "Stammkunden-Angebot" (regular customer offers) on the specific products each loyalty member buys most. A push notification saying "Your weekly offers are ready: the products you buy regularly are on Mitgliederpreis this week" delivers the message that the regular customer receives better value than a new shopper.
2. Require coupon activation before the visit to create pre-shopping engagement. PENNY's coupon activation requirement generates pre-visit app engagement that non-activation discount models cannot achieve. An independent retailer should require loyalty members to "activate" weekly offers through a digital notification before the visit. The activation creates a visit intention signal that the retailer can track, and the act of activating reinforces the loyalty programme value before the customer enters the store.
3. Use member pricing to address your most price-sensitive product categories. PENNY uses member prices specifically on products where Aldi and Lidl competition is most intense: commodity groceries and household staples. An independent retailer should identify the product categories where price-competitive alternatives are most easily found (milk, eggs, bread, household cleaning products) and deploy member pricing precisely on those categories to remove the price objection for regular loyal customers.
PENNY vs. German Discount Grocery Loyalty Alternatives
| Brand | Programme | Personalised coupons | Member pricing | Points earn | App activation |
|---|---|---|---|---|---|
| PENNY App | PENNY (2,150+ DE) | Yes (purchase-history) | Yes | Yes | Yes (required) |
| Lidl Plus | Lidl | Yes | Yes | Yes | Yes |
| Netto App | Netto | Yes | Yes | Limited | Yes |
| Aldi | None | No | No | No | No |
| Independent wallet pass | Your store | Yes | Yes | Yes | Yes |
Getting Started
PENNY demonstrates that discount grocery loyalty in Germany works best when personalised coupons close the price gap on each regular customer's specific basket rather than offering generic discounts across the entire store. An independent German grocery or discount retailer that personalises offers to each member's purchase history, requires app activation to access the best prices, and deploys member pricing on price-sensitive commodity categories builds the same engagement and competitive positioning that PENNY achieves across its national network.
For an independent German grocery or discount retailer ready to build a loyalty programme with personalised coupon generation and member pricing, LoyaltyPass provides the wallet pass and notification tools to send personalised weekly offers, manage member pricing communications, and track activation and redemption rates. The product range and the pricing strategy are yours; the loyalty infrastructure is available from day one.
For context on how REWE, PENNY's parent group's supermarket brand, approaches the same German grocery customer with a different loyalty mechanic, REWE loyalty Germany covers the REWE approach and what German grocery retailers can learn from comparing the discount and supermarket programme models.
