German retailers sell to the world
Future customers: And when you grow up, you too will be able to shop at a German retailer...
This whopping sum is around three-and-a-half times more than leading grocer Edeka achieves on its home market.
German retailers began their international expansion in the late 1960's and have been gaining momentum ever since. The principal pioneers were Metro Cash & Carry and hard discounters Aldi and Lidl. But who else is conquering the world from Frisco to Sydney?
Lidl USA: Grand opening on the East Coast
The leader of the pack, accounting for nearly a third of all German retailer sales abroad, is Schwarz Group. The private company's Lidl and Kaufland subsidiaries posted revenues of around €61bn in 26 European countries outside the borders of Germany.
Schwarz Group may not be quite so exotic yet as Metro Cash & Carry whose empire stretches far into Asia. But Lidl's start in the US last month, Kaufland's plans to enter Australia shortly, and a new website in China reveal the scope of corporate global ambition.
Europe: The ten countries with the highest penetration by German retailers with market shares of the two largest players in per cent
Ranked by the number of retailers actively involved in the country concerned, the list changes to Austria, Hungary, the Czech Republic, Switzerland, Croatia, France, the Netherlands, Belgium, Spain and Rumania.
A question of perspective
The colossal revenues achieved by German retailers abroad translate to some significant stakes in smaller neighbouring countries. Rewe Group subsidiary Billa and Aldi South already have a 29-per-cent viz. 15.2-per-cent market share in Austria, while Lidl/Kaufland and Rewe hold 27.2 per cent and 14.3 per cent, respectively, in the Czech Republic.
USA: Estimated gross annual revenues and market shares of Trader Joe's and Aldi South
Nice to meet you, again
Meanwhile, German retailers look set to grow their global reach. Aldi South is about to start in Italy and recently went online in The People's Republic of China. Lidl intends to invest €1bn per annum in the United States, which has forced arch-rival Aldi USA into expansion overdrive. Both Schwarz Group and Aldi South are destined soon to meet Down Under.
All retailers obviously remain extremely evasive when asked about their future international expansion plans. This reticence has only increased since giants such as Carrefour and Tesco have been obliged to prune their overseas empires in recent years.
This phenomenon, of course, also provides chances. Should, for instance, Tesco exit Eastern Europe, as many pundits have long speculated, all or part of the store base could be used to boost organic expansion.
Asia: Metro is still the only German pioneer
Although the Dusseldorf-based company defines Asia in its own specific way, Lebensmittel Zeitung has computed total net sales in the region for The People's Republic of China, India, Japan, Kasachstan, Pakistan, Russia and Turkey at €9.4bn. This is no mean achievement by anyone's standards, but in no way can Metro be called a dominating factor.
Strangely, given the huge populations and exciting growth potential involved, German retailers have been happy to leave Latin America and Africa to their French and US competitors to date. Presumably they were discouraged by partially high country risks, including corruption. It cannot be the distance, otherwise neither Schwarz Group or Aldi would be in Australia today.
So perhaps it won't be so very long before we have an Aldi in South Africa, a Lidl in Mexico or a Metro Cash & Carry in Kenya?
Australia: €5bn in gross sales and a 10 per cent market share for Aldi
Readers are also referred to an excellent interactive chart, compiled by Jörn Ratering & Marco Kitzmann on LZ-Digital (paywall). This shows the annual sales and national market shares of eleven German retailers in 41 countries worldwide.
The author wishes to acknowledge the wonderful help provided by senior analysts Frauke Vor dem Berge and Matthias Queck on the LZ Retailytics team as well as by Lebensmittel Zeitung graphic designer Gudrun Kiender.
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