No Room for Discounters in the Austrian Electronic Retail Sector

The MediaMarkt/Saturn group has a dominant position in the Austrian electronic retail market. With the bankruptcy of Cosmos this dominance has become even more visible. Taking the fast price erosion of electronic goods into consideration discounters are scarcely a sustainable business type in the electronic retail market.

The largest sales area in the Austrian electronic retail market has the MediaMarkt/Saturn group. In 7 of 9 counties the MediaMarkt and Saturn stores together dispose of the largest sales area. This only differs in both the easternmost county Burgenland, where the brand Red Zac belonging to the Euronics group is market leader and in the most westerly county Vorarlberg, where the Electronic Partner group is in the top position according to sales area.

The quick ageing of products and the price decline of electronic goods makes it hard to establish a discount business type in this sector. Chances to grow are rather to be found in the specialised trade, as the example of DiTech, dealing with computer and software, shows. When a company becomes an obvious market leader, like it is the case for MediaMarkt/Saturn, niches and spaces for other retailers open up. Not to be underestimated are the chances given by the free spaces in shopping centres after the bankruptcy of Cosmos. In this case some of the electronic retail cooperations able to administer larger floor spaces are in demand. Besides this there are other shopping centres that try to improve their tenant mix and would need an electronic retailer in order to strengthen their location.