Part Four Global Retail Analysis

Part Four Global Retail Analysis

Retailing in Europe

Topic Area Germany France Common Factors

Consumer Characteristics

As of 2004, Germany was in a midst of social upheaval. As the economy has become globalized, high paying German jobs have been exported to other countries. The result has been an erosion of middle class and an increase of lower paying jobs [1]. Today Germany has the problem of being overstored which means there are too much retail space for the population base. Over the past two decades there has been tough times for German non food retailers and brand name food products are interchangeable.

France is one of the oldest and most diverse retail networks. It is home of both the department stores and hypermarket format. France is Europe's second largest retail market after Germany. Although France and the United Kingdom have about the same population, France purchases over half as much as the UK [2]. Nearly 75 percent of France population lives in urban areas with 9.3 million people living in Paris. France is big in moving into foreign markets.

Both countries are very diverse when it comes to their retailers. France is a very urban area as most people live in Paris. Germany has had set backs as most people have lower paying jobs. Besides that, both countries have large retail space and consumers purchase a lot.

Consumer Spending

Most of Germanys spending goes toward grocery stores and supermarkets, but as of 2004, the second and leading domestic retailers happened to be discount food retailers. In a government survey, consumers spend most of their money in food retailers. Germans also spend a good of money on fashion with H&M being the world's largest fast-fashion retailer and Germany is their largest market [3].

The French hypermarket has spread throughout the world. Carrefour is the second largest retailer in the world and operates in 35 countries. Frances leading domestic retailers as of 2004 were mostly hypermarkets and grocery stores. 7 of the top 8 retailers happened to be hypermarkets or supermarkets. France also has a large non food retailing population. PPR is Europe's largest nonfood retailer and about half of the company's sales occur in France. Louis Vuitton Moet Hennessy sells some of the world's most famous luxury brands and is huge in France.

Consumers spend lots of money in both countries. France is more upscale than Germany and gets people to spend lots of money on accessories. Germans money mainly goes towards its super and hypermarkets.

Types of Retailers

Germany is very diverse when it comes to its retailers. Even though the past two decades have been tough for German retailers, Germany has lots of food and fashion retailers. H&M nearly has 300 stores in Germany alone and accounts for nearly a quarter of their sales. Germany's main retailers are the food retailers, with Edeka Group being the largest retailer in Germany [4]. Aldi is the second largest retailer which can also be found here in America.

France has a very diverse retail population. France is a country with many regions. Originally retail chains developed in regional areas and now these regional chains are giving away national chains. France is a very popular place for shopping and has lots of upscale retailers. Specialty store chains are taking away from traditional market stores. As for food retailers, supermarkets and hypermarkets are the largest in France. Most Frances retailers grow so big that they expand overseas.

Both countries have very diverse retailers. The one thing most companies have in common is the fact they both have super and hypermarkets. Both countries have a very popular nonfood retailing audience also.

Government Regulations on Retailing

Germany has one of the most regulated retail environments in Europe. The tax structure significantly reduces spending. The Euro replaced the German mark in 2002. After the introduction of the euro, there was a decline in consumer expenditure that the industry called the Euro Shock. Consumers viewed products as being more expensive when they were considered Euros than marks. In 2002, Germany introduced a law that requires all publishers to fix prices for newly published books, sheet music, and photo products. Germany also has a requirement that levies a deposit on disposable packaging for specific beverages. Almost everything in Germany gets regulated.

France like most European countries has law restricting large scale retailing expansion. These laws have made expansion in France difficult. These newest laws make domestic expansion almost impossible for new stores [5]. All retailers in France are required to obtain a permit. This law has been in act for 20 years.

France and Germany both have serious regulations against their retail environments. Expanding internally in both countries is very hard difficult, while expanding global is allowed.

Retail Technology

Germany is one of the leaders in retail technology. All leading retailers have websites, and some companies have 30 or 40 sites. Germany retailers have combined the highest technology and information tags. In 2003, Edaka Nord developed a traceability system for beef which you can track products