Aldi and Lidl in pedestrian zones: discounters conquer the city centers

For a long time, city centers were taboo for Aldi and Lidl. The rents were just too high there. But now discounters are crowding more and more into Germany's pedestrian zones. An experiment that also harbors risks for companies.

The image of German city centers is changing. More and more fashion stores have to give up because of online competition and the effects of the Corona crisis. Instead, completely different stores are now pushing into the shopping streets: Aldi and Lidl. "Wherever it works from the rental price level, the discounters try to get into the absolute prime locations," said Dirk Wichner, Head of Retail Letting Germany at the international brokerage group JLL.

For years, the much-visited city centers were a kind of no-go area for low-cost providers. The rents were simply too high to be able to sell groceries there at discount prices. "That has changed fundamentally since more and more textile retailers have had to give up," emphasized Wichner.

The discounters make no secret of their plans. Aldi Nord is realizing "more and more markets in direct inner-city locations, shopping centers and pedestrian zones at central urban hubs," reported a company spokesman. Such central locations would not least be made possible by the increasing number of retail spaces in the city centers.

"These are experiments"

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(Photo: picture alliance / dpa)

Aldi Süd is also finding branches in city centers very attractive. "Aldi Süd is" city-clear "and ready to use future opportunities and, as a frequency anchor, to close gaps in city centers," said a company spokesman. In cooperation with Galeria Karstadt Kaufhof alone, the discounter has already realized seven inner-city branches. In Düsseldorf, the discounter also has two shops in the pedestrian zone, and in Stuttgart it will soon be found on Königsstraße.

Arch-rival Lidl has also long been on its way to the city, for example with shops on Carlsplatz in Düsseldorf or the Isartor in Munich. "We deal intensively with high street locations at junctions with public transport connections," said Lidl property manager Marek Franz of the "Lebensmittel Zeitung".

The target group of the new city shops are not only local residents but also commuters who want to do their daily shopping quickly on the way home. The high footfall made the shops in the city centers attractive, Wichner reported. "There is a tough competition for the best locations between the discounters. The fight is tough." That doesn't necessarily mean that success is guaranteed.

"That is not necessarily a sure-fire success," warned trade expert Marco Atzberger from the Cologne trade research institute EHI. "It is not without reason that classic shops have large parking spaces in front of the door. Customers should make the largest possible purchase and then comfortably transport it home." That is not possible in a pedestrian zone and will have an impact on the size of the shop. "These are experiments," said Atzberger, referring to the city shops.

The battle for the locations

The fact that the discounters are ready to dare the "pedestrian zone experiment" in spite of the associated risks is not only due to the lower rents in the inner cities. For them, the city centers are the last blank spots on their Germany map. And the pressure on discounters is great to open up new growth opportunities. Because the Corona crisis brought all food retailers considerable sales increases. But the big supermarket chains fared significantly better than their cheap competition.

According to the data from the Gesellschaft für Konsumforschung (GfK), Edeka, Rewe and Co. achieved a sales increase of 16.5 percent in the first nine months of this year, while Aldi, Lidl and Co. achieved growth of "only" 9, 2 percent had to be satisfied. "The city centers are still uncharted territory for the discounters. But I am sure that we will see many more branches there in the next few years. The discounters are really stepping on the gas in the battle for locations there," says Wichner.

And other retailers are also in the process of venturing into the inner cities that have so far been dominated by fashion retail. Real estate expert Atzberger reported: "It is not just the discounters who are flirting with new locations in prime downtown locations. DIY stores and furniture retailers such as Ikea are also experimenting with it."

. (tagsToTranslate) Economy (t) Discounter (t) Aldi (t) Lidl (t) Corona crisis (t) Rent