2011 was once again a successful year for retailing in Germany, with higher overall retail value sales compared with 2010. After the economic and financial crisis and subsequent recession (which negatively affected Germany, as virtually all other countries in 2008 and 2009), in 2010 and 2011 the German economy achieved extremely good growth, which also boosted consumers’ confidence and purchasing power. These factors in turn meant excellent basic conditions for retailing. Following notably stronger value growth of 1.3% in 2010, 2011 current value growth was a steady 1.1%, marginally slowing down from the growth seen in 2010, as demand stabilised.
Non-store retailing outperforms store-based retailing in 2011
Non-store retailing channels, which include internet retailing, direct selling, vending and homeshopping, overall saw stronger development in 2011, posting 3% current value growth, compared with just 1% for store-based retailing. However, all channels within non-store retailing declined in current value terms in 2011 with the exception of internet retailing, which posted robust double-digit current value growth. Internet retailing is taking value sales away from the homeshopping channel in particular, as well as store-based retailing. The rapid development of technology and the fast pace of life of modern consumers supported the strong growth of internet retailing. Nonetheless, store-based retailing still accounted for the bulk of consumer expenditure in retailing in Germany up to 2011.
Non-grocery retailers shows more dynamism than grocery retailers in 2011
Store-based retailing on the whole recorded sluggish, albeit still positive current value growth in 2011. Saturation, strong competition, as well as continued strong competition from private label all served to dampen value growth, especially for grocery retailers in 2011, with the key channels of supermarkets and discounters posting 1% current value growth. The performance of non-grocery retailers – a more fragmented retail landscape in Germany – was relatively stronger, with key channels such as chemists/pharmacies and furniture and furnishings stores showing healthy performances. In particular, non-grocery channels catering to lifestyle trends saw a respectable performance in 2011, as consumers increasingly paid more for these items, whilst maintaining the same budget for grocery items.
Local grocery chains maintain their leading positions
Whilst retailing is fragmented in Germany, a significant proportion of value share remained in the hands of local players in 2011, with the top five retailers being the big discounters and supermarket chains. These companies had the financial muscle to restructure, expand and invest in their organisations in 2011. In addition, they showed high product innovation in private label, as well as carrying out frequent new product launches and the expansion of existing ranges. The top three chains, Edeka, Lidl, and Rewe continued to broaden their product ranges to offer a wider choice, and included more organic and “natural” food lines in 2011.
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