Variety Stores in Austria

PROSPECTS

Pleasantly unpredictable shopping experience entices Austrians to variety stores

Given the popularity of relatively new brands Tedi, Action and Flying Tiger Copenhagen and their continuing expansion activities, variety stores is expected to remain one of the fastest-growing channels in store-based retailing in Austria over the forecast period. In contrast to a continuing drop in outlets in overall store-based retailing, the number of variety stores is predicted to record healthy growth over the forecast period, while the average store size is also anticipated to increase significantly, as channel brands look to capitalise on the considerable untapped potential.

Low prices drive the high performers

Tedi, Action and Flying Tiger Copenhagen, with their clear economy-priced positioning, experienced the strongest growth within variety stores over the review period. Additionally, most other operators in variety stores were independent “euro shops” with diverse product mixes at low prices, usually limited to round euro price points.

Little e-commerce variety as yet, while stores scale up

Many players in variety stores do not operate online stores and the channel hardly feels any pressure from competition through e-commerce. Visiting the brick-and-mortar shops and checking which items they currently offer provides consumers with an entertainment value that only comes with the in-store experience.

COMPETITIVE LANDSCAPE

The bulk of sales is generated by Eduscho, but profits are thinning

Eduscho (Austria) GmbH remained the leader player in variety stores in Austria in 2019, but continued to lose value share to competitors TEDi GmbH & Co KG, Action Retail Austria GmbH and Tiger Stores Austria GmbH. The company has gradually reduced its branch network in the past 10 years in Austria in search of greater profitability and at the same time increasing its investment in foodservice and upgrading its online shop with features such as exclusively online products and click-and-collect.

Competitors look to spread their footprint in Austria

In addition to TEDi GmbH’s plans to extend its store network in Austria to 200, Action Retail Austria is expected to build a chain of at least 100 stores – and was at the halfway point for this in 2019. Competition is going to be stiffer in the forecast period and it remains to be seen how the parallel expansion affects the profitability of the Tedi and Action brands.

Flying Tiger Copenhagen offers a different angle

Flying Tiger Copenhagen does not directly compete with Tedi and Action in Austria. The brand also relies on budget-priced products with a portion of regularly changing items.

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