Distribution Networks in Germany

Overview by Globlatrade.net:

Types of Outlet

Non specialized department stores, located in the city center.
Kaufhof, Karstadt, Kadewe
Shopping malls, located in the city center, bringing stores together on areas of 10 000m2 to 50 000m2.
Arcaden, Passagen, Carré, center
Large stores specialized in textiles.
Peek&Cloppenburg, H&M, C&A
Specialized department stores: for example electronics, DIY (Baumarkt)
Saturn, Media-Markt, Conrad Electronic, Bauhaus, Obi, Hellweg
Supermarkets, located in the city center, specialized in foodstuffs.
Kaiser, MiniMal, Edeka, Rewe, Extra
Supermarkets specialized in beverages, located in the city center.
Fristo, Hol'ab
Organic supermarkets, located in the city center
LPG-Biomarkt, Bio-Company, Naturkostladen
Fruit and vegetable markets, in the city center, open air or covered markets.
Markthalle, frische Märkte
Small local shops, grocery stores, located in the city center, often selling regional specialties (Turkish, Italian, Greek).
Hard discount stores located in the city center and on the outskirts.
Lidl, Aldi, Plus, Netto
Cash & Carry
Hypermarkets and fresh produce markets reserved for professionals.
Métro, Frische Paradies, Beussel Markt

Evolution of the Retail Sector

Growth and Regulation
With more than 82 million inhabitants, the German market is the largest in Europe; it is very competitive and segmented, with many sectors and products being saturated; the quality and services offered are essential. The main economic areas are North Rhine-Westphalia, Baden Wurtenberg, Bavaria, Hamburg, Berlin and Hanover, plus Leipzig for former East Germany.
Market Shares
Germany's distribution structure is characterized by:
- the large number of small independent shops;
- the sector's low level of concentration, compared with the main European markets (France, United Kingdom, Belgium);
- the predominance of distribution in city centers and urban areas;
- very few "hypermarket" style stores;
- the domination of "hard discount" stores and the importance of distance selling (mail order, e-commerce, teleshopping).

German distribution is divided between the following distribution channels: Traditional retail trade (24.8%); Specialized hypermarkets (22%); Nonfood chain stores (13%); DIY hypermarkets (11.7%); Discounters (11%); Supermarkets (7.9%); Distance selling (5.8%); Department stores (3.8%). Sources : Ifo-Institut & destatis

The three leading German distribution groups are Metro, Rewe and Edeka/Ava. « Hard discount » is the leading type of food distribution, registering growth of about 10% and generating 40% of total food sales. The rise of discounters such as Lidl or Aldi has forced distributors to wage a price war: so, insufficient margins may slow down the modernization of sales outlets and the development of new distribution concepts. Relations between distributors and their suppliers, said to be very difficult, have become even more strained. A trend towards concentration has appeared and groups such as Karstadt-Quelle, Edeka-Tengelmann, and discounters like the American Wal-Mart are now competing hard, bringing down suppliers' margins.

Organizations in the Retail Sector
German Retail Business Federation (German only)

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