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Department Stores - Germany - April 2016

“German department stores need to move from being laggards to leaders in service innovation and new product development if they are to stand a chance of surviving much beyond the current decade. New ownership and investment could provide a vital shot in the arm that allows them to achieve this, but the duration and extent of their decline from favour among German consumers will make this an exceptionally difficult task.”
– Richard Perks, Director of Retail Research

This report discusses the following key topics:

  • Innovation needs to accelerate on core product areas
  • Falling behind on online versus in-store service

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Table of contents

  1. Overview

    • What you need to know
      • Areas covered in this report
      • Executive Summary

          • The market
            • Spending and inflation
              • Department stores’ share of clothing and beauty markets
                • Figure 1: Germany: Estimated distribution of consumer spending on clothing and footwear by value in % terms, 2014
              • Sector size and forecast
                • Leading players
                  • Key metrics
                    • Market shares
                      • Figure 2: Germany: Estimated shares of mixed goods retailers’ sales by value, 2015
                    • Online
                      • The consumer
                        • Where they shop
                          • Figure 3: Germany: The consumer: Department stores visited in the past six months, whether in-store or online, March 2016
                        • Satisfaction levels
                          • Figure 4: Germany: The consumer: Attitudes to department stores, March 2016
                        • What we think
                        • Issues and Insights

                          • Innovation needs to accelerate on core product areas
                            • The facts
                              • The implications
                                • Falling behind on online versus in-store service
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Consumer spending provides more buoyant background
                                        • Department stores under competitive pressure
                                          • Sector contracts again in 2015
                                          • Spending

                                              • Figure 5: Germany: Spending on key department store product markets, (incl. VAT), at current prices, 2010-15
                                            • Department stores’ share of clothing & beauty markets
                                              • Mixed goods retailers the fourth largest channel for clothing
                                                • Figure 6: Germany: Estimated distribution of consumer spending on clothing and footwear by value in % terms, 2014
                                              • Pressure from low price and online retailers
                                                • Mixed goods retailers’ share of the beauty market
                                                  • Figure 7: Germany: Estimated channels of distribution for personal care products (excluding services), 2013-15
                                              • Sector Size and Forecast

                                                • Department store sector size
                                                  • Figure 8: Germany: Department store sector, estimated sales (excl. VAT), 2012-15
                                                • Mixed goods sector continues relative decline
                                                  • Figure 9: Germany: Mixed goods retailers’ sales (excl. VAT), 2010-15
                                                  • Figure 10: Germany: Mixed goods retailers’ sales forecasts (excl. VAT), 2015-20
                                              • Leading Players – What You Need to Know

                                                • Market leader Galeria Kaufhof has a new owner
                                                  • KaDeWe also sees international investment
                                                    • Midmarket underperforms but upmarket operators fare better
                                                      • Online sales small
                                                      • Leading Players

                                                        • Galeria Kaufhof bought by Canada’s Hudson’s Bay Company
                                                          • Midmarket operators miss out on growth in retail sales
                                                            • KaDeWe majority stake goes to Thailand’s Central Group
                                                              • Niche upmarket operators perform better
                                                                • Figure 11: Germany: Leading department stores retailers’ sales, 2012-15
                                                                • Figure 12: Germany: Leading department store retailers, store numbers, 2012-15
                                                                • Figure 13: Germany: Leading department store retailers’ annual sales per outlet, 2012-15
                                                            • Market Shares

                                                              • Karstadt continues to fall behind Galeria Kaufhof
                                                                • Figure 14: Germany: Leading department store retailers’ shares of mixed goods retailers’ sales, 2012-15
                                                            • Online

                                                              • Online activity
                                                                • Big department stores lag in online development
                                                                • The Consumer – What You Need to Know

                                                                  • Galeria Kaufhof a long way ahead
                                                                    • Two main players closely positioned
                                                                      • Customers happier with in-store experience than with online
                                                                      • Where They Shop

                                                                        • Galeria Kaufhof remains market leader
                                                                          • Figure 15: Germany: The consumer: Department stores visited in the past six months, whether in-store or online, March 2016
                                                                      • Customer Profiles

                                                                        • Main players attract affluent visitor base
                                                                          • Dangers of cannibalisation
                                                                            • Figure 16: Germany: The consumer: Department stores visited in the past six months, whether in-store or online, average age and affluence, March 2016
                                                                        • Satisfaction Levels

                                                                          • Changing rooms and staff attitude see highest satisfaction
                                                                            • Room for improvement in advice, returns and catering
                                                                              • Lack of strong views on many aspects
                                                                                • Figure 17: Germany: Department store used most often, satisfaction with various criteria, March 2016
                                                                              • Attitudes to department stores and where people shop
                                                                                • Galeria Kaufhof more often ahead on satisfaction
                                                                                  • Figure 18: Germany: Attitudes to department stores and where people shop, March 2016
                                                                              • Galeria Kaufhof (Hudson’s Bay Company)

                                                                                  • What we think
                                                                                    • New hope under HBC
                                                                                      • Keeping existing management in place
                                                                                        • HBC ownership will give it more negotiating power and investment
                                                                                          • Focus on beauty, shoes and handbags
                                                                                            • Major investment to include revamps of ten key store locations
                                                                                              • Online expansion and development needs to accelerate further
                                                                                                • Introducing the Saks OFF 5th outlet format
                                                                                                  • Competition from fellow department store Karstadt remains weak
                                                                                                    • Company background
                                                                                                      • Company performance
                                                                                                        • Figure 19: Galeria Kaufhof: Group financial performance, 2010/11-2014/15
                                                                                                        • Figure 20: Galeria Kaufhof: Outlet data, 2009/10-2014/15
                                                                                                      • Retail offering
                                                                                                      • Karstadt (Signa Retail)

                                                                                                          • What we think
                                                                                                            • “Kaufstadt” tie up finally off the agenda
                                                                                                              • Fashion focus on core customer of 45-plus woman
                                                                                                                • Shakes up other merchandise areas with new partnerships
                                                                                                                  • Online strategy appears to be languishing
                                                                                                                    • KaDeWe Group has major investment planned
                                                                                                                      • Company background
                                                                                                                        • Company performance
                                                                                                                            • Figure 21: Karstadt (Signa retail): Group financial performance, 2010/11-2014/15
                                                                                                                            • Figure 22: Karstadt (Signa Retail): Outlet data, 2010/11-2014/15
                                                                                                                          • Retail offering
                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                            • Abbreviations
                                                                                                                              • Data sources

                                                                                                                              Companies Covered

                                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                                              Department Stores - Germany - April 2016

                                                                                                                              £995.00 (Excl.Tax)