NKD, Action & Co.

Which low-cost retailers are booming in Austria

Comparing prices and ingredients is important to customers.

(Bild: drazen zigic - stock.adobe.com)

As more and more consumers have too little money, discount stores are on the rise in Austria. They already turn over an estimated 10.1 billion euros per year. Particularly popular now are special offer stores, which score points with rapidly changing product ranges at extremely low prices.

The triumph of low-cost retailers continues unabated: While more and more traditional retailers are struggling to survive or are forced to close, discount stores are springing up like mushrooms. They already have 2885 branch locations in Austria and have an estimated turnover of 10.1 billion euros. People from Burgenland, Carinthia and Lower Austria particularly like to spend their money in low-cost stores.

"The most dynamic player recently was NKD," reports Roman Schwarzenecker, Managing Director of Standort+Markt, who has analyzed the market in this country. The German low-cost clothing retailer, which also sells home textiles and home accessories, has increased its store network to 326 stores and is now behind discount retailer Kaiser Hofer. Some of the prices can even compete with the dumping offers of the Chinese online giants Temu or Shine, which are flooding red-white-red households with parcels.

Promotional stores, which attract customers with all kinds of goods, have also grown particularly quickly. While there were only 13 branches of various providers in 2009, this year there are already 337 across Austria, according to Standort +Markt. The German chains Tedi and Thomas Philips are just as active as Action, which was founded in the Netherlands and has already opened more than 100 stores in Austria. "We offer a surprising, varied range and convince with the lowest prices. Two thirds of the range is constantly changing. Between 75 and 150 new items land on the shelves every week. This flexibility allows us to react very quickly to customer requests," says Austrian boss Boyko Tchakarov, explaining his concept.

(Bild: Krone KREATIV | Quelle: Standort+Markt | Foto: stock.adobe.com)

Fying Tiger from Scandinavia is represented by 15 stores. Head of Austria Anna Eiselsberg: "Each customer buys an average of 3 to 4 items per purchase." The best sellers are the 500 products that change every month to match the season.

Woolworth is currently launching for the second time in Austria, where it was already present once before the bankruptcy in 2009. Austria sales manager Ivana Jezidzic announces that the company wants to have 30 stores in Austria by the end of the year. Half of the product range will be sold for less than three euros.

Action Austria boss Boyko Tchakarov: "We want to surprise with our range."

(Bild: Action)

It is hardly surprising that discount stores are booming. More and more consumers have too little money due to the loss of purchasing power. "Discounting has become socially acceptable," says expert Schwarzenecker. This is also reflected in the fact that low-cost retailers are increasingly opening in city locations and are also popular in shopping centers as a source of footfall, even if they often pay less rent than traditional retailers.

Mömax and Möbelix are the first port of call for anyone who needs or wants to save money. Company spokesman Thomas Saliger: "Our price reductions are an incentive for many people to fulfill their postponed home wishes."

The discount grocery store now has a third more branches than 15 years ago. For many customers, inexpensive shopping is becoming more important in times of inflation, according to Penny, for example.

However, being cheap alone is no guarantee of success. The overall concept has to be right for consumers to want to come in. According to expert Schwarzenecker, the withdrawal of Preispirat or Cherry Sonderposten is evidence of this.