Almost half of Germans visit stores in city centres at least monthly, driven mainly by grocery shopping, and with outlet centres popular among younger shoppers and families. Older Germans are more likely to shop in store, with 86% of Baby Boomers doing so, vs 77% of Gen Zers and Younger Millennials. Younger consumers visit physical stores more frequently, however.
High inflation has led to cautious spending and consumers prioritising value. As its grip eases and confidence grows, consumer spending will increase, including on non-essentials, with opportunities for in-store retailers to attract shoppers with exciting shopping and socialising experiences.
Groceries account for 47% of sales from physical stores, and the top five grocers control nearly 27% of total retail sales. Coupled with increasing competition from online platforms and their convenience, this results in intense price competition across many categories.
Enhancing customer experiences with better store designs and crafting engaging, family friendly settings offer key opportunities to grow in-store retail. In parallel, leveraging smart stores, AI screens and doors and technologies like in-store digital avatars will appeal to wealthier, younger shoppers.
In-store retail is reviving with shoppers seeking immediate access to products as well as sensory and social interaction. Meanwhile, the integration of AI is enhancing convenience and excitement.
Armando Falcao, Associate Director – Retail Reports
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