Non-food discounters in Germany are outpacing their food counterparts and other retailers, as 70% of Germans shop at homeware discounters and 66% at fashion discounters. Takko has the most satisfied customers, while TEDi lags in shopper satisfaction compared to other non-food discounters.
Easing inflation has improved consumer sentiment, but living costs remain high, leading to high consumer demand for value-driven shopping and an increased focus on essential categories. This is particularly true among families, allowing discounters like Action to grow rapidly by offering variety and newness at affordable prices.
Balancing ethical practices with competitive pricing poses a significant challenge to non-food discount shopping in Germany. Ethically conscious consumers expect ethical practices, potentially jeopardising the low-cost appeal of these retailers, and non-food discounters also have room to improve their range of branded items.
There’s opportunity to leverage the rising trend of value-driven shopping, particularly with exclusive loyalty rewards and attractive bundle-offers among families. As demonstrated by Action’s winning strategy, offering lower prices on a dynamic range of products can drive sales by fostering repeat visits and encouraging a ‘treasure hunt’ behaviour.
This report looks at the following areas:
- Market performance and the effects of the rising cost of living in Germany
- Who is buying from discounters and what types of non-food products are being purchased
- Channels and discounters used to purchase non-food products at discounters
- Understanding and establishing purchase drivers for non-food discount shopping
- Customer satisfaction with discounters and behaviours towards non-food discount shopping
- Innovations by leading retailers, including the use of new technology, sustainable initiatives and providing an omnichannel experience
Non-food discount shopping is booming, driven by value-seeking consumers, but a focus on variety and loyalty rewards can boost satisfaction as consumer confidence and spending both rise.
Armando Falcao, Associate Director – Retail Reports
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EXECUTIVE SUMMARY
- Overview
- Key issues covered in this Report
- The five year outlook for non-food discount shopping
- Market context
- The higher cost of living forced Germans to spend more
- Graph 1: household private consumption expenditure (incl VAT), 2016-24
- The increased focus on price has led people to shop more at discounters
- Graph 2: breakdown of retail sales by retailer category, 2019-24
- Non-food discounters are growing twice as fast as food discounters
- Graph 3: retail sales from food and non-food discounters (excl VAT), 2015-24
- Discounters will continue to grow as Germans seek value when shopping for the home
- Non-food discount shopping to grow as shoppers seek value in essential categories
- Opportunities
- Leverage the rise in value-driven shopping for essentials
- Captivate the young with tech integration and omnichannel strategies
- Offer one-stop shopping locations to those seeking convenience and socialising opportunities
- Unlock families’ interest in discount shopping and loyalty rewards
- The competitive landscape
- Food discounters benefit from more frequent store visits to engage with shoppers
- Graph 4: non-food discount shoppers who typically shop at food and non-food discounters, 2024
- Competition remains high as discounters fight for opportunities in non-food
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MARKET DRIVERS
- Inflation and consumer confidence
- Easing inflation to improve consumers’ willingness to spend
- Graph 5: harmonised consumer price index, by category, 2022-24
- Consumer confidence is rising as the economic situation improves
- Graph 6: financial confidence over the next year, 2023 vs 2024
- Graph 7: changes in financial situation vs previous year, 2023 vs 2024
- Non-food discounters are consolidating their place in retail with lower prices, variety and newness
- Sustainability and ethical shopping
- Germans are increasingly adopting more ethical and mindful shopping habits
- Stricter scrutiny from more conscious shoppers
- Omnichannel shopping
- German consumers shop both in-store and online
- Graph 8: consumers who shopped online and in-store, by age, 2024
- Online offers different growth opportunities across categories
- Graph 9: online retail sales (excl VAT), by category, 2023
- Graph 10: average annual growth in online sales, by category, 2014-23
- AI and technological integration
- Generative AI is transforming the retail landscape
- Discounters are experimenting with smart stores
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WHAT CONSUMERS WANT AND WHY
- Frequency of shopping at discounters
- Grocery shopping favours food discounters in shopping frequency
- Graph 11: how often consumers shop at food and non-food discounters, 2024
- Make the most out of each customer visit
- Shopping at non-food discounters skews towards younger buyers
- Graph 12: Where they shop for non-food items, by age and household income, 2024
- Foster younger shoppers’ higher usage of non-food discounters
- Families drive discount shopping in Germany
- Graph 13: discounter shopping habits, by household type, 2024
- Leverage families’ need for variety and affordability
- Discounter used the most
- 27% of non-food discounter shoppers spend the most at Action
- Graph 14: non-food discounters that consumers spend the most money with, 2024
- Action and TEDi are favoured by the young, while older non-food shoppers are more likely to spend the most at KiK
- Graph 15: non-food discounters that consumers spend the most money with, by age group, 2024
- Target product range and marketing initiatives to consumers’ age group
- Non-food discounters have different appeal across income levels
- Graph 16: non-food discounters that consumers spend the most money with, by net monthly household income, 2024
- Discounters used to shop online
- Food discounters saw considerable growth in online activity
- Graph 17: discounters consumers use to shop online, 2020-24
- Lidl and Takko encourage shoppers to use their apps
- Millennials are driving online shopping at discounters
- Graph 18: food and non-food discounters used to shop online, by generation, 2024
- Entice higher-income households with an engaging and convenient online experience
- Families want to shop online at discounters
- Strengthen online competitiveness against food discounters with a wider range
- Graph 19: food and non-food discounters used to shop online, 2024
- Non-food products purchased at discounters
- Germans are inclined to buy specific categories at food discounters
- Graph 20: non-food items bought at non-food discounters, 2024
- Graph 21: non-food items bought at food discounters, 2024
- Expand the non-food range with everyday essentials
- Explore strategic partnerships with food brands to attract grocery shoppers
- Graph 22: repertoire of categories purchased at discounters, 2024
- Higher-income shoppers are more likely to buy furniture, clothing and entertainment at food discounters…
- Graph 23: non-food products consumers buy at food discounters, by net monthly household income, 2024
- …and more likely to buy health & beauty, electricals and footwear at non-food discounters
- Graph 24: non-food products consumers buy at non-food discounters, by net monthly household income, 2024
- Captivate wealthier shoppers with specially curated premium product lines
- Entice younger shoppers with exciting products for their first home
- Graph 25: items bought at food discounters, by generation, 2024
- Graph 26: items bought at non-food discounters, by generation, 2024
- Support younger Germans in setting up their early homes
- Target families with affordable fashion and products for the home
- Graph 27: items bought at food discounters, by household, 2024
- Graph 28: items bought at non-food discounters, by household, 2024
- Explore bundle offers and targeted discounts to encourage trading up
- Behaviours towards non-food discount shopping
- Target young shoppers with omnichannel shopping
- Leverage sales to families and the young with strong loyalty rewards
- Graph 29: consumer behaviours towards buying non-food products at discounters, 2024
- Increase sales with enticing loyalty discounts on non-food categories
- Omnichannel shopping is key to target younger discounter shoppers
- Graph 30: consumer behaviours towards buying non-food products at discounters, by generation, 2024
- Increase engagement among the young with an omnichannel experience
- Leverage families’ interest in loyalty rewards and one-stop-shopping
- Graph 31: behaviours towards shopping at discounters, by household 2024
- Attract shoppers with smaller stores that are closer to their homes
- Graph 32: consumers who find it appealing to shop at smaller discounter stores, by generation, 2024
- Satisfaction with non-food discounters
- Satisfaction with chosen non-food discounter is high
- Graph 33: satisfaction with the non-food discounter where consumers spend the most money, 2024
- Differentiate by improving beyond the basics
- Non-food discounter stores are easy to navigate
- Increase shopper satisfaction with a more enticing range of branded products
- Graph 34: dissatisfaction with branded items in the non-food discounter they spend the most money with, by gender and age, 2024
- Takko shoppers are the most satisfied
- Graph 35: level of satisfaction with the non-food discounter they spend the most money with, 2024
- Non-food discounters see varying levels of customer satisfaction
- Graph 36: customer satisfaction with elements of the non-food discounter they spend the most with, by non-food discounter, 2024
- Germans welcome better service and product quality at non-food discounters
- There is room to improve customer service and branded products
- Leverage shoppers’ already high satisfaction with their go-to non-food retailer
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RETAILER ACTIVITY
- Competitive strategies
- Non-food discounters have been outperforming wider retail
- Takko’s strategy boosts sales and customer satisfaction in fashion discounting
- Action is growing fast by combining variety and newness, offered at affordable prices
- Primark is resizing, modernising and growing
- KiK holds bold expansion plans for Europe
- TEDi to beautify its stores and narrow its range
- Flying Tiger, the discounter from Copenhagen
- Leading supermarkets outshine Lidl and Kaufland
- Leading non-food discounters in Germany
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MARKET ACTIVITY
- Discount sector size
- Non-food discounters have grown twice as fast as food discounters
- Graph 37: retail sales of food and non-food discounters (excl VAT), 2015-24
- Non-food discounters are growing faster than all retailers and food discounters
- Discounters to grow as Germans maintain demand for good value
- Non-food discounters are growing faster than retailers and food discounters
- Whilst growing much faster, non-food discounters remain smaller
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APPENDIX
- Appendix – products covered, abbreviations, generations, consumer research methodology and language usage
- Products covered in this report
- Abbreviations
- Generations
- Consumer research methodology
- A note on language
- Appendix – key driver analysis
- Key driver analysis methodology
- Key driver analysis: customer satisfaction with non-food discounters
- Appendix – market size and forecast
- Forecast methodology
- Forecast methodology – fan chart
- Market size – value – total discounter market and forecast
- Market size – value – food discounter market and forecast
- Market size – value – non-food discounter market and forecast
- Market forecast and prediction intervals – value – food discounters
- Market forecast and prediction intervals – value – non-food discounters
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