germany and retail

7/30/2019 germany and retail

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Group 5:

Rohit BhartiyaSaikat GhoshSandeep Jain

Shriya BeriKirti MisraVinny Sethiya


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About Germany Federal Republic of Germany

Situated in west central Europe


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Covers total area of 357,021 km2 of which2.416% is water

Berlin is the largest city and the capital

German is the official language


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Population Recent estimate 81,305,856 people

Ethnic groups

81% Germans7% other Europeans4% Turks2% Asian

6% others Urban population: 74% of total population (2010)


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Currency Euro unified currency for all of Germany

1 Euro = 1.32$

Dollar falling against Euro due to news of fallen CPI


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Top & cities by buying power Munich has maximum buying power and is also a

favourite with expats

Berlin Dsseldorf

Frankfurt

Hamburg

Cologne

Stuttgart.


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Next five tier two investment

opportunities Nuremberg

Karlsruhe

Dresden Regensburg

Potsdam


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Analysis GDP fell in 2009 because of subprime crisis that

engulfed the world

Exports fell to other European nations and China Mittelstand forced to cut productions


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GDP Growth Projections The GDP is expected to grow at .6% in 2012 and 1.5% in

2013

All depends on outcome of euro zone crisis, how themajor economies of euro zone perform

Effects of quantitative easing in US and economicconditions in China


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Economic Performance of the Retail in 2011

Gross domestic product2570.80 billion Euros

Private Consumption1474.42 billion Euros

Share of GDP: 57.4%

Retail sales : 422 billion

euro's

Share of GDP: 16.4%


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Retail sales

Billion Euros

Changes to previous years inpercentage


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B2C-E-Commerce

In billion Euros


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Market Share Development

by farm types 2000-2011

Chain stores

Traders

Purchasing and stores

consignor

Online

Trading

ConvenienceHawking

Institutional

Second-handshop

Hypermarket

Supermarket

Discounters

Craft


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Retail space in retail

(million square feet)


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Major Trends continuously rising sales development in Germany from 2004 to

2008

between 2006 (EUR 4.6 billion) and 2009 (5.85 billion euros),steadily increasing sales of organic products in Germany

Since 2005, increasing sales figures of products with the MSClabel worldwide

increasing supply of FSC-labeled wood products in more than1800 retail outlets of major retailers

more than 10,000 products in the retail carry the Blue Angel, andrising


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Adverse effects of some laws on

FDI in retail Stringent labour laws affected profitability of retailers

like Walmart negatively

Standard of living high in Germany, much higher thaneven US

Mandatory benefits to employees( health,unemployment, retirement benefits)


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Increases in Domestic Demand bode well for theeconomy, suggesting that:

consumers will demand and purchase more goodslocally

fuelling business profits and growth

Such growth indicates the strength of the economy andis bullish for the Euro.


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Top 10 retailers in GermanyTurnover in Germany for 2011 in Million

Rank Retailer Turnover No. of stores

1 Edeka 42,000 11,831

2 Rewe 39,000 10,893

3 Lidl 31,500 3,584

4 Aldi 24,440 4,283

5 Metro C&C 13,743 437

6 Tengelmann 11,340 4,519

7 MediamarktSaturn

9,087 381

8 Lekkerland 6,720

9 Obi 6,200 348

10 Otto 5,785 -


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Area served: EuropeServices: Cash & Carry/Warehouse Club,Convenience/Forecourt Store, Discount Store, ElectronicsSpecialty, Home Improvement,Hypermarket/Supercenter/Superstore, Other Specialty,SupermarketRevenue: US$ 58.658 billion (2009)Employees: 250,000

Area served: EuropeProducts: Discount Stores, Grocery Stores, Conveniencestores, Cash&Carry, Hypermarkets ,Home improvement andOptical, Pharmacy, Clothing ,Cosmetics and moreRevenue:48 billion (2011)Employees: 323,000 (2011)

Area served: GlobalProducts: Discount store,hypermarket/supercenter/superstoreRevenue: 59 billion (2010)

Area served: GlobalProducts: Discount store, SupermarketRevenue: 53 billion (2009)


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Area served: GlobalProducts: FMCGRevenue:33.1 billion (2008)Employees: ~100.000 (2007)

Products: Grocery Stores, Discount Stores, Homeimprovement and DIY stores, Apparel & Accessories and moreRevenue: 24.5 billion (2005/2006)[1]Employees: 151,753

Area served: GlobalProducts: Consumerelectronics

Area served: GlobalProducts: Home improvement products such as homeappliances, tools, household hardware, and garden supplies& plants.Revenue: 7.1 billion (2006/2007)Employees: 38,000

Area served: GlobalProducts: Multi-channel Retail

Employees: ~53,000


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The top 10 retailers in Germany are all based inGermany.

Most of them are international retailers and have theirbusiness all over Europe.

There has been no major entry of modern retailersfrom outside Germany.


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Failure of Wal-mart in Germany Wal-mart's low price strategy yielded no competitive

advantage. Also Wal-mart's corporate culture was notviewed positively among employees and customers in

Germany, particularly Wal-mart's "statement of ethics",which restricted relationships between employees and ledto a public discussion in the media, resulting in a badreputation for Wal-mart among customers. Also Wal-

mart's "Big Box

Low Price" Model, a price strategy thatworks well in the U.S., was not successful in Germany.

In July 2006, Wal-Mart announced its withdrawal fromGermany due to sustained losses.


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Germanys evolution in retail Rapid growth took place two decades ago

Resulted in swift and modern consolidation of stores,weeding out inefficient, small, less-adaptive stores

Results

Manufacturers forced to cut costs and better supplychain

Employment was not swallowed up

Large chain was actually a cooperative of smaller stores


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germany and retail

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