What you need to know
The major German department stores are attempting to emerge from a painful period of contraction and consolidation in the sector with new investment being planned by the international owners of three key players, Galeria Kaufhof, owned by Hudson’s Bay Company; Karstadt, owned by Austrian property company Signa; and KaDeWe Group, in which Thailand’s Central Group recently bought a 50.1% stake.
The sector contracted in 2015, declining by 1.7% to €6.5bn, and we expect that along with the wider mixed goods retail sector, worth €16.5bn, it will suffer further market share erosion as it faces greater competition from fashion and health and beauty specialists as well as from growing online operators like Zalando and Amazon.
Areas covered in this report
There is no hard and fast definition for a department store. But, we would expect stores to typically trade from a minimum of 1,000 sq m and stock at least half a dozen different broad product categories, with one category unlikely to account for more than two thirds of turnover, and usually significantly less than this. This report does not look at small format mixed merchandise operators, like Tchibo.
As a minimum, all department stores covered in this report sell adult and children’s apparel, lingerie, fashion accessories, footwear, beauty products and some homewares. Larger full-line stores have a much wider product assortment.
Some department stores have food halls, and these are typically upscale and geared towards fine foods and delicatessen, and so are differentiated from the everyday supermarket.
The offer usually covers a mix of concessions and own-bought ranges, increasingly with a private label element within the own-bought assortment.
National statistics offices do not collate data on a department store sector. Around Europe, department stores are typically included within the broader Mixed Goods Retailers sector.
This is something of a catch-all sector covering not only large-space department stores, but variety stores, non-food discount stores and a whole host of other retailers that do not specialise in any one particular non-food product category.
