Variety Stores in Germany

2020 IMPACT

Expansion continues during pandemic

Government-imposed lockdown measures following the emergence of the COVID-19 pandemic inevitably led to sales decline for variety stores in 2020. However, the channel suffered relatively limited sales losses compared with other non-grocery store-based retailers and, more importantly, continued to expand in terms of outlet numbers despite the pandemic leading to an increased number of closures in store-based retailing overall.

Discount model sees growing popularity amidst crisis

Even though the economic conditions were favourable for nearly a decade before the COVID-19 pandemic, discount variety stores surged in 2020, based on German consumers’ interest in the discount model, which provides competitively-priced products with acceptable quality. Prominent players such as Action and Tedi offer a broad spectrum of permanently available products, from decorative items to DIY products, but also trendy seasonal items which are temporarily available – showing similarities to the previous focus of discounter chains such as Aldi.

Variety stores face emerging online competition

Whilst store-based retailing suffered tremendously as a result of rapid growth in e-commerce in recent years, variety stores was much less affected. This is because online players rarely had competitive prices in the product categories offered, and variety stores themselves avoided online shops altogether or closed them again, as Tedi did in 2019, based on insufficient profitability.

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