Distribution Networks in Germany
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.
- 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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Companies wishing to use distribution, franchising and agency arrangements need to ensure that the agreements they put into place are in accordance with European Union (EU) and Member State national laws.
U.S. Commercial Service Germany on 5 Jan 2010 related to Distribution Networks in Germany
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