Retail Tissue in Germany

2020 IMPACT

COVID-19 leads to surge in retail tissue sales in 2020

Retail tissue sales received a strong boost from the COVID-19 pandemic in 2020 due to several factors: in the initial stages of the pandemic consumers stockpiled household essentials such as toilet paper and paper towels, which led to a temporary double-digit rise in volume sales of these products; later in the year, when consumers had finished their stockpiled products, consumers were still spending more time at home, thus using more retail tissue products. This is in contrast to the slump experienced by AFH tissue sales, where the closure of consumer foodservice outlets, schools, and offices dented demand significantly.

Consumers unwilling to compromise on comfort

While environmental concerns have grown in recent years, comfort and softness is still seen to be a key factor in the purchasing decision when it comes to retail tissue. This was reflected in the strong performance of non-recycled toilet paper in 2020.

Private label, especially of grocery retailers, extends lead in 2020

Private label has the undisputed reign in the retail tissue landscape in Germany, with the top-of-mind brands among consumers typically being private label, be it Kokett from Aldi Group or Floralys from Lidl & Schwarz Stiftung & Co KG. As a basic commodity product, German consumers already commonly purchase private label retail tissue as part of their retail shopping and consider the quality to be comparable to brands.

RECOVERY AND OPPORTUNITIES

Increased home usage to ensure higher consumption of retail tissue over the forecast period

While 2021 witnessed a double-digit surge in retail tissue sales, an element of these sales were from stockpiling, which in turn is likely to lead to a decline in constant retail value sales in 2021 as consumers first finish the products they have in stock. Nonetheless, overall sales growth at 2020 prices and specifically growth from 2022 onwards is expected to be positive due to German consumers spending more time at home resulting in increased usage of various retail tissue products.

Price expected to settle at more reasonable level during the forecast period

After price rises at the end of the review period due to rising costs, a price battle is likely to start as manufacturers begin to operate with lower profit margins to attract customers to their products whilst remaining competitive. As such, volume growth is expected to outpace current value growth in the forecast period as a whole.

E-commerce will feature more prominently in the forecast period

While the pandemic has accelerated the growth of e-commerce uptake in retail tissue in 2020, online shopping will still take some time to develop in the coming years due to a large number of consumers still finding it sufficient to include their purchases of toilet paper, paper towels or pocket handkerchiefs in their regular grocery shopping at a discounter. However, the entry of a major new player could upset the competitive landscape moving forward.