German organic supermarkets in 2010: 65 expansions and openings

17 new specialist organic stores (200-400 m²) and 48 organic supermarkets (over 400 m²) were opened in 2010, of which 14 were removals to new premises with an expansion of retail space. Research by Organic-Market.Info has shown that by the end of the year new retail space measuring approximately 29,539 m² was created in 65 large-scale stores - with loss of old space through changing premises factored in. Retail space lost through closures came to 8,357 m², of which 1,697 m² are accounted for by the insolvency of Kompledo AG and a further 1,870 m² by the insolvency of Envita. The effect of the demise of the Vierlinden chain, that was announced at the end of 2010, will make itself felt in 2011. (Graphic: Openings of specialist organic stores and organic supermarkets since 2000)
According to the database of Organic-Market.Info, at the beginning of 2011 Germany has around 580 specialist organic stores and organic supermarkets with more than 200 m² of retail area. Between 25 and 83 new organic supermarkets were launched in each of the other years since 2000, with the year 2007 seeing the peak of this development. The economic and financial crisis that erupted in the autumn of 2008, in conjunction with a growing shortage of premises, brought about a decline to around 60 – 70 expansions and new openings in the years that followed. The data for 2010 reflect this development. The increasing competition among organic supermarkets, and between organic supermarkets and the conventional retail trade, should not be underestimated. This competition is giving rise to more and more insolvencies and to the closure of some unprofitable businesses, an example being the Rewe subsidiary Vierlinden, whose five stores are being either closed or sold to competitors. The premises in Aachener Straße in Cologne is to become a Temma store. Temma is Rewe’s second attempt at organic supermarkets. With hindsight, the closure a year ago of the Vierlinden store in Eching near Munich was the beginning of the end of the Vierlinden concept. The Temma store that was opened at the end of 2009 in the Bayenthal district of Cologne by the company Bio-Konzept GmbH has, however, not been followed by further stores. The people responsible for this Rewe subsidiary are also responsible for the Vierlinden stores that are operating at a loss and have not returned to profit. (Picture: denn’s Bio in the lead in 2010 with 18 new openings)

In 2009, 58 new specialist organic stores and organic supermarkets were opened, of which 14 were removals to new premises with more retail area – seven fewer than in 2010. By the end of 2009, 25,485 m² of new retail area had been created, which is about 15 % less than in 2010 (the calculation takes account of loss of area through closures).

In terms of the number of new openings in 2010, the chains with 36 new stores (55 %) overtook the 29 new owner-managed stores (45 %). Last year, more than half the new retail area (53 %) was created by Alnatura, denn’s Bio, Bio Company and the other chains (a total of 16,829 m²). The figure for 2009 was 61 % - eight percent higher.

The average retail area per newly opened specialist organic store/organic supermarket was 487 m² and thus about 2.5 % bigger than in the previous year (476 m²). For years, the average retail area of new stores has been between 400 and 500 m², and so far there is no sign of stores with an average area of, for example, 800 – 1,200 m². When Erdkorn attempted to create stores of this size in Hamburg, the outcome for the former owner, Thomas Hinz, was insolvency. Retail area of this magnitude is profitable only in particular locations with an especially high footfall.

Distribution across the federal states of Germany produces the following picture: with 21 new specialist stores, Bavaria is far ahead of the other states; it is followed by Northrhine-Westphalia with 12 and Baden-Württemberg with nine new openings. Berlin and Saxony each had five, Hesse four and Rhineland-Palatinate two new openings. Each of the following had one new specialist store: Brandenburg, Hamburg, Lower Saxony, Saarland, Saxony-Anhalt, Schleswig-Holstein and Thuringia. The numbers confirm the long-term trend – people in the south are more bio-savvy than in the rest of Germany. It is pleasing to see that the federal states in the east of Germany, with seven new openings in 2010, are slowly catching up.

In Switzerland, the organic flagship store in Bern has announced its departure. It is expected that at the beginning of April 2011 the first organic supermarket in Switzerland, Vatter’s “Logischer Supermarkt” (picture), will close its doors after a good 18 years. In the autumn of 2009 the organic restaurant belonging to Vatterland AG and located above the supermarket closed. Now it is the turn of the 380 m² organic supermarket itself that is located at the Bärenplatz, a very favourable intersection in downtown Bern. The reason for closure is principally the drop in turnover. In 2008, the turnover of the store was nearly 10 million Swiss francs (6.7 million euros), a figure that was higher than ever before, but then it fell by almost 16 %. Of the 47 employees, 38 will lose their jobs. This closure will not affect the Business Center, the Wellness area “espace-bien-être” and the specialist ladies’ fashion shop “nature-à-porter”, that are also located in the building that belongs to Thomas Vatter.

What are the prospects for 2011? Will it be a year of closures or will the trend of the last three years with its 60 – 70 openings a year continue? What is certain is that there will be some closures like Alnatura in Kassel and takeovers of some premises (as in the case of Vierlinden). On the other hand, some of the by now 17 organic chains have already announced new openings – Ebl is going to open two stores in Erlangen and Nuremberg, and Vollcorner would like to expand with two more stores, which would give it a total of nine. Landmanns Bio-Markt is likely to venture for the first time beyond Bavaria with a new store in Kronberg. Bio Company is planning new stores in the spring in central Berlin and in Friedrichshain. Of course, the industry leader, Alnatura, (picture: Cologne) has announced new stores in Hamburg, Freiburg and Frankfurt/Main, which will give the company around 62 outlets and a denser store network. In contrast, stand-alone independent retailers will have a harder time. However, the example of Alnatura in Kassel demonstrates that owner-managed specialist stores do not necessarily come off worst when they find themselves in direct competition with a chain. The case in point is Bio-Markt Greger (300 m²), that was opened before the launch of the Alnatura store and lived very successfully side-by-side with its now defunct competitor (100 m away) for nearly 20 years.