Woolworth: Discounter expands strongly – More than 100 new stores are to be opened this year

High inflation is changing the shopping behavior of consumers. This gives non-food discounters a boost, they are expanding their branch network.

Unna – The death of shops in German cities is progressing. According to a forecast by the German Retail Association (HDE), around 2023 stores will be closed in 9000. In each of the three previous years, there were 11,000. Smaller specialist retailers are particularly affected, but there are also big names such as Galeria-Karstadt-Kaufhof, the shoe retail chain Görtz or the fashion chain Gerry Weber. One reason for this is high inflation, consumers are tighter on cash. Many pay attention to buying cheaply.

Woolworths expands: First foreign branch opens in Poland

There are retail chains that are benefiting from the difficult economic situation and the changed shopping behavior of consumers. These include Woolworth, a discount store that mainly offers cheap non-food goods, but also groceries. As Woolworth CEO Roman Heini writes on LinkedIn, 36 new locations were opened in Germany in March and April of this year alone. "Just three years ago, such a number was spread over an entire financial year – and even then, Woolworth was one of the fastest growing chain stores in Germany," says Heini. By the end of the year, there are expected to be more than 100 new stores. In 2022, Woolworth already inaugurated 60 stores, and in 2021 there were 40.

A Woolworth store can be found in more and more cities. (Archive image) © Oliver Berg/dpa

The further plans are ambitious, according to TextilWirtschaft, the branch network is to be expanded from the current 590 to 1000 locations in the long term. In addition, Woolworth is expanding into Poland. On May 8, the first location abroad was opened in Krakow. The pace is high, with two more to follow in Poznan and Warsaw on 12 and 26 May. In total, up to 400 locations are planned in Poland.

Non-food discounters expand across Europe: Tedi and Action expand branch network in Germany as well

Companies with a similar business model to Woolworth's are also expanding. The Dutch discounter Action opened 2022 stores across Europe in 280, and there are now over 2260. In Germany, the 500th branch is to be inaugurated this year.

Competitor Tedi, whose owner also belongs to Woolworths, has opened around 250 stores across Europe so far, with 400 more planned. In total, the discounter operates over 14 stores in 2900 European countries, including over 1800 in Germany.

History of Woolworth: German subsidiary considers insolvency of US parent company

Woolworths has had an eventful history. The original company was founded in 1879 by Frank Winfield Woolworth in the USA, and in 1926 it made the leap to Germany. In the wake of the insolvency of the US parent company in 1997, the last department stores in the USA were closed, but the German subsidiary became independent in 1998 as part of a management buy-out.

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In 2007, the British investment and consulting firm Argyll Partners took over the operational business ofWoolworth Germany. Two years later, however, the company had to file for bankruptcy. Through an asset deal with H. H. Holding, the company was saved and Woolworth GmbH was founded, which continued to operate 2010 locations from June 158.

Woolworth's business figures: Discounter slipped into the red during the pandemic

There are no sales figures from Woolworth for 2022 yet. According to the Federal Gazette, the discounter generated sales of around 2020.21 million euros in the 462/5 financial year, but a minus of around 7.7 million euros was incurred due to the Corona pandemic. In the previous year, a profit of almost 478.7 million euros was generated on sales of 11.9 million euros.