German Top Retailers Cutting Outlets

Declining margins, rising location costs, and on top of that new competitors and increasing influence of online: all these factors are making a clear impact on Germany’s top retailers, who have shrunk their outlet networks considerably. Looking at Germany’s top retailers according to their number of outlets, we see that the networks of the top players are continuously shrinking.
Although leaders like Edeka, Rewe, and Lidl have for years now been staying ahead of the competition in terms of turnover, their outlet networks are following a negative trend. Whereas in 2009 Edeka still operated over 11,800 outlets, the company’s network has since been reduced to just 11,500. The same trend has been observed at Edeka’s competitors. Following several years of positive development, the Rewe Group reached its peak in 2010 with around 11,000 outlets. Starting in 2012, a regressive trend set in and now the company manages some 800 outlets less. With the exception of Aldi Süd, all the top food retailers have been cutting down their outlet networks. Of course, this is creating opportunities for niche enterprises such as organic supermarkets. Whereas denn’s bio (Dennree) was operating only 80 outlets in 2012, today the company manages some 200.
Top players have been reducing the size of their outlet networks in other sectors as well, including fashion (KiK) and electronics (Euronics). On the other hand, the leading drug store retailers have been expanding in the fast lane, with dm and Rossmann being prime examples. In 2012, dm had 1,345 outlets in Germany. This was followed by an average yearly increase of 130, such that in 2015, dm had expanded its outlet network to some 1,750 stores. Rossmann was not idle by any means. There are currently around 2,000 Rossmann stores in Germany, and this figure is still growing. The strong wave of expansion in Germany’s drugstore sector has certainly been driven significantly by the freed up turnover potential following the Schlecker insolvency.
Only the apparel sector does not show any unambiguous overall trend. Whereas KiK is shrinking its network, Ernsting’s family is starting to expand. This inconsistent development in Germany’s apparel sector is in turn strongly affected by the chosen retail formats, as well as rapidly changing customer preferences.