COMPANY PROFILE -Retail Industry in Germany
Business Sector :Retail
Operating Geography :Germany, Europe
About Retail Industry in Germany :
Germany has the highest GDP in Europe. It is also the largest when considering the population size and the purchasing power of the population (EUR 1,893 billion). The most prominent retailers of Germany are Edeka, Lidl, Kaufland, Rewe, Aldi and Media Markt – Saturn. Amazon and Otto are the largest e-retailers in the country. The consumers with age 50+, are the actual target for the retailers, as the segment has the largest consumer group with highest number of affluent consumers. Recent transformation into e-commerce and modern retail practices is helping the retail industry to increase the volumes as well a value of sales.
The retail industry revenue was recorded at EUR 644.08 billion in 2019 which was 2.67% increase over 2018 value. The revenue was 19.82% of Germany’s GDP, making retail the third largest industry in the country. The daily active customers of the retail market are around 50 million. The industry employs around 3 million in 300,000 different retail companies in the country. The e-commerce B2C sales is growing rapidly. It recorded a revenue of EUR 72.8 billion in 2020, an increase of 22.97% over the previous year.
The food and beverages industry performs best among all the segments in retail sector. Around 82 million consumers are active users of the food products at retail stores. The production of retail food items amounts to around EUR 180 billion annually. The industry is growing at a rapid pace due to innovation. The German retail food industry offers around 170 thousand different items. It is adapting to the culinary changes of the culture. As a result, 33% of the retail food products that are produced are being exported. The pandemic changed the consumption habit of the population. The demand for organic food products has increased substantially. For instance, Alnatura, an organic chain, achieved a revenue mark of EUR 1 billion for the first time in 2019-20 cycle. The online food retail has seen a growth due to changing consumer behaviour during the pandemic. Among all the online segments, food retailing saw the fastest growth of around 50% in 2019-20 over the previous cycle.
In the retail sector, DIY and Home Improvement market is the second largest segment. It accounts for 10% of the total consumer goods. The market had grown eight times in the period of 2014-18 and continues to grow even today. The textiles, shoes, and garments market are a close follower of DIY and Home Improvement market. German companies are leaders in production of garments as they generate EUR 35 billion in revenue. The textile production is distributed as 60% textile and 40% clothing.
The furniture market has also remained a crucial retail segment as it accounts for 7% of the total sale. There is a growing trend of ‘research online and purchase offline’. The internet has made the customers highly conscious of their choices. Technology adoption and flexible services will be the future of retail in Germany.
Retail Industry in Germany Revenue :
EUR 644.08 billion in 2019
Competitive Analysis of Retail Industry in Germany
The SWOT analysis for Retail Industry in Germany is presented below in a matrix followed by the detailed analysis report:
| Strengths | Weaknesses |
1. Food retail in Germany is the largest in Europe
2. High CAGR for online trade
3. Continuous development of innovative sales services
4. Largest affluent consumer class | 1. Unable to compete with foreign e-commerce giants
2. Poor working conditions at warehouses |
| Opportunities | Threats |
1. Personalized solutions in demand
2. Expansion into developing markets
3. Innovation in after-sales services | 1. Cannibalization of stationary trade by online trade
2. Small stores in cities suffering with Covid waves
3. Consumer spending getting hindered due to curfews
4. D2C brands making retail redundant |
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Detailed SWOT Analysis of Retail Industry in Germany
Strength
1. Food retail in Germany is the largest in Europe: Germany is Europe’s largest market for food retailing, food service sales, and exports of processed foods. The ‘food and beverage’ industry is the fourth largest industry in the country when considering its contribution to the GDP. It is a clear winner when compared to other categories such as garments, shoes, furniture, and DIY home improvement retail. There are around 6000 companies in the sector where majority are small and medium sized enterprises. The German food retail is known to be the third largest exporter of food items in the world. The technological advancements have helped the country to consistently export one third of its processed food. The German retail chains around the world are known for quality and value for money. This is one of the reasons why large retail chains have been adding private labels to their portfolio.
The remaining section under "Strength" is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
1. Personalized solutions in demand: More than a million Euros are being invested by retail giants, in technologies that can provide personalized retail products. A benchmark report called Germany Online by eTail Germany, states that from the 100 top executives it interviewed, all of them have responded to take up a minimum investment of Euro 250,000. The executives are trying to build a digital ecosystem for their stores. In this the customers use the online interface of the store by creating a personal profile. The retailers are trying to monitor the customer journey so that they understand the buying patterns of the customers. In return the customers get to enjoy better service such as an upgraded delivery, apart from the customised products. The leaders in fashion and furniture retail are seeing increased sales due to such customised solutions.
The remaining section under "Opportunity" is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
The PESTLE analysis for Retail Industry in Germany is presented below in a table followed by the detailed analysis report.
| Political | Economical |
1. Large government stimulus to stabilize the industry
2. UK-Germany trade and cooperation agreement to help businesses | 1. Growing GDP resulting into high consumption
2. High unemployment to reduce the purchasing power |
| Social | Technological |
1. Consumers highly informed due to internet
2. Increased number of households led to increased consumption
3. Declining German population will lead to loss of consumers | 1. Omni channel retailing, necessary for growth
2. Voice-search devices to influence shopping |
| Legal | Environmental |
| 1. Loosening of M&A restraints | 1. Consumer switching to green goods |
Retail Industry Germany – SWOT and PESTLE Analysis PDF Report is a custom report and will be delivered to your email inbox within 2 business days from purchase.
Detailed Pestle Analysis of Retail Industry in Germany
Political
This section is available only in the 'Complete Report' on purchase.
Economic
1. Consumer switching to green goods: The German consumers prefer buying goods that have minimal impact on the environment. The retail outlets selling environmentally sustainable products are able to see accelerated growth in their revenue. inRiver, a product information management specialist reported in its study that, if a product is said to be recyclable or made from recycled material, as per the packaging, then 49% of the consumers are ready to pay a premium for this product. The product returns are also getting reduced if the customers are aware of the environmental footprint due to the return. For instance, if the customers are hesitant about the choice of product due to the aesthetics, then they might not return the products if they are aware of the carbon footprint due to the logistics involved. The retailers need to set in place the policies for sourcing of sustainable items.
The remaining section under "Economy" is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
This section is available only in the 'Complete Report' on purchase.
Retail Industry Germany – SWOT and PESTLE Analysis PDF Report is a custom report and will be delivered to your email inbox within 2 business days from purchase.
TABLE OF CONTENTS
DELIVERY AND FORMAT
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Check Out Analysis of Other Relevant Companies
References used in Retail Industry in Germany SWOT & PESTLE Analysis Report
1. The Food & Beverage Industry in Germany - https://www.gtai.de/resource/blob/64004/e80f4dd7ccd691158b0ee2bc10f8cd6c/industry-overview-food-beverage-industry-en-data.pdf
2. MANAGEMENT REPORT Structural change in the German retail sector - https://ambiente.messefrankfurt.com/content/dam/messefrankfurt-redaktion/christmasworld/documents/managmentreport-structural-change-german-retail.pdf
3. Consumer Markets & Retail Landscape - https://www.gtai.de/gtai-en/invest/industries/consumer-industries/consumer-markets-retail
4. Aldi and Lidl at back of queue during UK pandemic - https://www.ft.com/content/812077d6-aef3-4f27-98ae-1c1a131077f2
5. German retailers are investing in personalization - https://ecommercenews.eu/german-retailers-investing-personalization/
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Retail Industry in Germany SWOT and PESTLE analysis has been conducted by Mohit Harishchandra Deshmukh and reviewed by senior analysts from Barakaat Consulting.
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