Non-food discounters boom in times of crisis: How low prices dominate the market

Non-food discounters boom in times of crisis: How low prices dominate the market

In economically difficult times, Germans keep their money together. According to figures from the Society for Consumer Research, the desire to buy is lower than it has been in 15 years. Retailers fear a decline in sales across the board. But one industry is rejoicing: the discounters. Those who offer cheap products can look forward to increasing customer numbers. In economically difficult times, Germans keep their money together.

According to a report by www.mdr.de Discounters in Germany, such as Action Discount from the Netherlands and Woolworth, have enjoyed great success in recent years. Action Discount was able to increase its operating profit by 46 percent to 1.2 billion euros and only offers 6,000 products in its stores, a quarter of which cost less than one euro. Woolworth was also able to increase its market share by opening 120 new stores in the current financial year. According to spokesman Roland Rissel, the market for non-food discounters has become very successful. Discounters have a clear advantage, especially in times of crisis, as they can offer good value for money.

Woolworth's German branches have been owned by a GmbH in Unna since 2010 and have focused on the non-food portion. The number of articles was reduced from almost 26,000 to 10,000. Erik Maier from the Leipzig Business School (HHL) explains that the success of discounters is based on efficiency. In Germany, the cheap concept finds a grateful audience outside of times of crisis, as the “stinginess is cool” shopping mentality works particularly well here.

However, not all discounters benefit from this development. The top dogs in the general goods discount are Action, Woolworth and Tedi, while smaller chains such as MacGeiz, Kodi or Pfennigpfeifer are having problems and the market is being divided between the big players. Successful discounters are primarily those who do not cross the fine line into becoming a junk shop image. Most discounters also do without an online shop in order to attract customers to the branches in person.