Dusseldorf At first glance, the number promises paradisiacal times for the retail sector: According to calculations by the market research company GfK, the average per capita purchasing power will rise to EUR 24,807 this year. Mathematically, this corresponds to a significant increase of nominally 4.3 percent or 1013 euros.
However, the market researchers cannot predict how much of this will actually reach retailers and which retailers will actually benefit. Much more likely than an upswing is a struggle for survival for traders this year.
The consequences of the pandemic will keep trade under control for a long time to come, that is foreseeable. And anyone who is not currently selling groceries or doing pure online trading must check carefully whether their business model can cope with the even tougher framework conditions.
The listed German trading companies are affected by this development in very different ways. While some even benefited from the pandemic, others have suffered heavy losses in sales. They are going into the new financial year with different strategies.
Ceconomy: Online boom and investments in stationary business
Electronics retailer Ceconomy, with its chains Media Markt and Saturn, is feeling what an acid test the pandemic can be for retailers. But despite months of business closings in many countries, the company was able to close the past financial year with a slight increase in sales. “Our business model is robust and crisis-proof,” emphasizes Ceconomy boss Karsten Wildberger.
In its forecast, the company assumes that the problems in the supply chains and restrictions in the wake of the pandemic for retail will normalize somewhat this year. Therefore, Ceconomy is aiming for a “very significant improvement” in operating profit.
And sends an important message to the stationary trade: Although Ceconomy is now the third largest online retailer in Germany, the company continues to invest in the branches and develops store formats specially tailored to the respective location. This year, Ceconomy wants to open the first of up to 35 planned new “lighthouse markets” in Germany – probably in Berlin.
For brick-and-mortar retail, it is crucial that the shops offer the customer additional benefits. An incentive to come downtown instead of buying online. Media Markt and Saturn rely on additional services in the stores, such as repairs or help with setting up devices. After the end of the lockdown last year, sales grew by double digits again and are now more than one billion euros.
Metro: New strategy and concern for customers
The plight of the catering trade is reflected in the course of business at Metro. The closure of the restaurants in the first half of 2020 caused the wholesaler’s sales to collapse, as a result of which this could not be fully made up, the financial year ended on September 31 with a minus of 0.4 percent.
With the spin-off from Ceconomy in 2017 and the sale of Kaufhof (2016) and Real (2020), the company focused entirely on wholesaling – making it even more dependent than before on the success of the catering trade. With numerous digital tools that Metro offers restaurant operators for little money, the wholesaler now wants to make them fit for the future – and thus also secure their own business.
Metro’s Capital Market Day on January 26th is eagerly awaited when Metro boss Steffen Greubel, who has been in office since April 2021, will present his new strategy. The main features of the new strategy can already be guessed at: The former Würth manager will probably concentrate on strengthening operational sales. He also wants to expand the delivery business and is not ruling out takeovers.
The goals are ambitious: The wholesaler wants to close the current year with a sales increase of three to seven percent. “Now is the time when we can expand our market share,” says Greubel confidently.
Zalando: The boom is weakening
The biggest problem currently facing online retailer Zalando is its own success. When the stationary stores were closed at the beginning of the pandemic and many people rediscovered shopping online, Zalando experienced growth rates of more than 40 percent.
As a result, the share price tripled and peaked at over 100 euros. But as these growth rates could not be sustained, disillusionment soon set in.
Zalando is well positioned with its strategy for the post-corona period. On the one hand, the retailer is being transformed into a marketplace, thus offering a platform for stationary fashion retailers looking for new sales channels. Zalando itself earns from the commissions.
On the other hand, the company has recognized that the topic of sustainability is becoming more and more important to young customers in particular – a trend that is intensifying during the pandemic. In this way, the company uses its market power and obliges its brand partners to adhere to stricter ecological and social standards in the supply chain.
In addition, it is becoming apparent that the change in customer behavior is permanent. With more consumers going into stores again, many have come to appreciate the convenience of e-commerce. The proportion of online trade will remain above that from before the pandemic.
About You: Optimistic despite a difficult start
Since going public in mid-June 2021, About You’s price has been steadily downhill for months. The long-gone e-commerce euphoria, with which Zalando is also struggling, hit the company completely. Because more and more investors became aware that online trading is not a sure-fire success either – especially when you sell fashion.
Founder and company boss Tarek Müller is not deterred by this. “I don’t care about the current market price. Those who invest in us do so because they believe in our long-term vision, ”he said in an interview with Handelsblatt.
He is banking on two trends: On the one hand, he is expanding the range of his own brands in order to offer customers exclusive products that they cannot get anywhere else. For example, About You is opening the “Why Not” online shop this spring, a joint venture with well-known personalities from the German-speaking hip-hop scene.
On the other hand, mastering the technology is also becoming more and more important for retailers. About You has therefore bundled its technology competence in its subsidiary Scayle and offers other retailers its web shop technology and additional services such as logistics and online marketing.
“No customer orders just because they think the technology is so great,” says founder Müller. “But everything that inspires the customer can ultimately be traced back to the technology.”
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