Germany State of Retail: In-store Shopping Market Report 2024
The in-store retail market Germany is reviving as shoppers seek immediate access to products as well as sensory and social interaction.
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EXECUTIVE SUMMARY
- Overview
- Key issues covered in this Report
- The five-year outlook for in-store shopping
- Market context
- Slowing inflation and rising confidence to encourage increased spending
- Graph 1: harmonised consumer price index, by category, 2022-24
- The higher cost of living has led Germans to increase their spending
- Graph 2: household private consumption expenditure (including VAT), 2014-24
- The shift to online has reversed following the pandemic
- Graph 3: ecommerce as percentage of total retail sales, 2016-24
- The pandemic has taught Germans to enjoy and seek omnichannel shopping experiences
- Mintel predicts
- Market size and forecast
- Growth of in-store retail sales will be driven by improving confidence and higher spending
- Consumers feel increasingly confident, and in-store shopping can benefit
- Opportunities
- Retain shoppers by leveraging the convenience of omnichannel shopping
- Incorporate social elements to reinvent the shopping experience
- Bring the buzz by transforming in-store shopping into a celebrity event
- Leverage shoppers’ need for cleanliness and ease of navigation with fully automated stores
- The competitive landscape
- Product categories experience different in-store shopping dynamics
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MARKET DRIVERS
- The German economy
- Inflation slowly eases its grip on German in-store shopping
- Graph 4: harmonised consumer price index, by category, 2022-24
- Easing inflation is reflecting on stronger consumer confidence
- Graph 5: financial confidence over the next year, 2023 vs 2024
- Graph 6: changes in financial situation vs previous year, 2023 vs 2024
- Consumer spending
- Consumer spending has grown steadily, despite consecutive crises
- Graph 7: private household consumption expenditure (including VAT), 2014-24
- Consumers are eager to engage with entertainment and the retail environment
- Omnichannel retailing
- German consumers shop both in store and online
- Graph 8: consumers who bought products in the last six months, by channel and age group, 2024
- Online retail plays distinct roles across product categories
- Graph 9: online retail sales (excluding VAT), by category, 2023
- Graph 10: average annual growth in online sales, by category, 2014-23
- Following two consecutive declines, online sales are again poised for growth
- Graph 11: online retail sales (excluding VAT), 2016-24
- Sustainability and ethical shopping
- Germans are increasingly embracing ethical and conscious shopping
- Refill concepts are gaining strength in beauty and personal care
- Graph 12: proportion of BPC launches in Germany with refill/refillable claims, 2019-24
- AI and technological integration
- Generative AI is transforming the retail landscape, with unprecedented levels of personalisation
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MARKET ACTIVITY
- Sector size and forecast
- After stagnating in 2021, in-store retail has been returning to steady growth
- Graph 13: in-store retail sales* (excluding VAT), 2016-24
- As consumer confidence continues to rise, so will in-store retail
- In-store retail to benefit from renewed interest in out-of-home experiences
- Graph 14: in-store retail as percentage of total retail sales, 2016-24
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WHAT CONSUMERS WANT AND WHY
- Where and how often consumers shop in store
- Nearly half of Germans visit high street stores at least monthly
- Graph 15: how often consumers visit the following retail formats, 2024
- Leverage social experiences to target younger consumers
- Younger Germans drive high street shopping
- Appeal to a wider group with stores that encourage customers to linger
- Leverage families’ interest in day trips to retail parks and outlet centres
- Graph 16: those who visit at least monthly, by household type, 2024
- Reasons for in-store shopping
- Accessibility is key when choosing a store to visit
- Graph 17: reasons consumers choose the stores they visit, 2024
- Target older shoppers with convenient stores and shopping processes
- Convenience attracts older Germans while younger shoppers value the social side
- Graph 18: reasons consumers have shopped in store, by generation, 2024
- Attract younger Germans to stores with exciting socialising opportunities
- Younger shoppers are highly engaged with outlets
- Captivate consumers by helping them make more conscious shopping decisions
- Target wealthier, younger in-store shoppers with exclusive dining and leisure
- Graph 19: reasons to shop in store, by net monthly household income, 2024
- What consumers purchase in store
- Essential categories are favoured when shopping in-store
- Essential categories are bought in store primarily by women
- Graph 20: what consumers purchase in store, by gender, 2024
- Tailor store environment and marketing initiatives to target audiences
- Nearly four in 10 in-store shoppers stick to just one or two product categories
- Graph 21: repertoire of product categories purchased in store, by generation, 2024
- Discretionary items are bought in store by younger and wealthier consumers
- Graph 22: products purchased in store by shoppers average age and net household income, 2024
- Older Germans drive in-store shopping for DIY and food and drinks
- Graph 23: what consumers purchase in store, by generation, 2024
- Offer in-store shoppers the buying experience they want
- Older Germans drive in-store grocery shopping
- Entice wealthier shoppers with personalised in-store shopping experiences
- Graph 24: items bought in store, by monthly household income, 2024
- Advantages of shopping in store over online
- Germans shop in store to get products right away and without delivery fees
- Graph 25: advantages of in-store shopping over online shopping, 2024
- Leverage consumers’ need for instant gratification and product interaction
- Free delivery appeals most to older, less affluent shoppers
- Graph 26: advantages of in-store shopping over online, by consumers’ average age and net household income, 2024
- Boost engagement across ages with great in-store services and exciting events
- Improve the in-store environment and offer sensory product interactions
- Target top earners by transforming in-store shopping into a celebrity event
- Important environment elements to shop in store
- Germans want cleanliness and well-stocked shelves
- Graph 27: important store environment elements when shopping in store, 2024
- Create stores where shoppers are encouraged to spend more time – and money
- Retain older shoppers with tidy stores
- Clean, full shelves for Baby Boomers; easy navigation and fun for Gen Zers and Millennials
- Graph 28: important store environment elements (any rank), by generation, 2024
- Entice shoppers’ need for cleanliness and ease of navigation with fully automated stores
- Create truly memorable in-store experiences for electrical goods shoppers
- Consumer behaviours towards shopping in store
- More than half of German shoppers struggle to find help in store
- Graph 29: consumer behaviours towards in-store shopping, 2024
- Explore the social dynamics of in-store shopping
- Leverage younger shoppers’ willingness to check in for tailored experiences
- Graph 30: behaviours towards in-store shopping, by age group, 2024
- Waiting to enjoy a quieter shopping experience
- Target wealthier shoppers with a more convenient and personalised experience
- Graph 31: behaviours towards in-store shopping, by net monthly household income, 2024
- Capitalise on families’ need for social experiences when shopping in store
- Graph 32: behaviours towards in-store shopping, by household, 2024
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RETAILER ACTIVITY AND INNOVATION
- The competitive landscape
- Leading supermarkets outpaced Lidl and Kaufland
- Retail giants dominate in store presence, but there is room for innovation
- Adapt strategies to match a changing retail market
- Winning strategies from drugstores and IKEA
- Leading German retailer groups – total sales
- Leading German retailer groups – number of stores
- Retail innovation
- Trendy and tidy shopping experiences in smart stores
- Rewe Pick & Go stores offer cashier-free convenience 24/7
- AI-powered smart screens are entering the in-store experience
- Creating stores with cozy atmospheres for lounging and browsing
- Leveraging in-store avatars to help shoppers find the right fit
- ReweToGo stores highlight easy navigation, convenience and freshness
- New dm store concept improves the in-store shopping experience
- Thalia launches an interactive social media cube in Düsseldorf store
- Thalia launches an interactive social media cube in its Düsseldorf store
- Granado’s first ice cream shop exceeds expectations with fragrance-inspired flavours
- Sports goods brands dazzle shoppers by bringing experiential shopping to new levels
- Erewhon, the celebrity supermarket in Beverly Hills
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APPENDIX
- Appendix – abbreviations, consumer research methodology and language usage
- Abbreviations
- Consumer research methodology
- Generations
- A note on language
- Appendix – market size and central forecast methodology
- Forecast methodology
- Forecast methodology – fan chart
- Market size – value – in-store shopping
- Market forecast and prediction intervals – value – in-store shopping
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.
In-Store Retailing Germany – Current Landscape
Mintel’s state of retail report shows that high inflation has led to cautious spending behaviour and consumers are 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.
Enhancing customer experiences with better store designs and crafting engaging, family friendly settings offer key opportunities to grow the in-store retail market.
In-Store Retail Market Germany – Market Statistics
- The State of Retail in Germany: Groceries account for almost 50% 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.
- Generational Differences in the In-Store Retail Market Germany: Older Germans are more likely to shop in store, with 86% of Baby Boomers doing so, vs 77% of Gen Z and Younger Millennials.
State of Retail Market Report – What’s Inside?
Key Topics Analysed in this Report
- In-store retail market performance, including the impact of inflation and the higher cost of living.
- Who shops in store, where and how often, and what products they purchase.
- Key advantages of shopping in store over online shopping.
- The State of the German Retail Industry: Understanding and establishing purchase drivers for in-store shopping.
- An analysis of consumer behaviours towards shopping in store.
- Innovations in the retail sector Germany, including the use of new technology, exploring socialising opportunities, and providing an omnichannel experience.
Meet the Expert Behind the Analysis
This report was written by Armando Falcao, Associate Director at Mintel. Armando had over 15 years’ experience in market research when he joined Mintel in 2019 to write the European retail reports. He re-joined Mintel in 2023 as Associate Director, focusing on the German market. Armando studied Business and Economics at the University of São Paulo and managed his own research business for 11 years prior to joining Mintel.
The in-store retail market Germany is reviving as shoppers seek 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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