Butchers now in calmer waters

According to the Deutscher Fleischer-Verband (DFV - German Butchers' Association) there were no disruptive influences such as food scandals last year, whereas the competitive environment continued to be affected by the ongoing changes in the food retail sector and the trend towards fewer but larger business units.



Sales posted by the butchery sector mirrored those of the meat market as a whole and fell by 0.7 per cent to EUR 16.313 billion.

On average, butchery sector businesses recorded slightly higher sales, with average turnover per company rising from EUR 1.178 million in 2013 to EUR 1.203 million last year.

Employment levels, according to the association, were once again largely unchanged. The slight reduction of 0.3 per cent was due solely to the continuing downturn in the number of companies and the demographic changes in the apprenticeship market. The butchery sector had a total of 143,070 employees on its books last year.

The growth of the individual butchery sector companies was reflected by the further increase in the number of employees per business. Ten years ago a typical butchery retail outlet had an average of 9.3 employees on its books, whereas this figure had increased to 10.6 last year. The numbers of apprentices fell even further as the problem of finding suitable new candidates for the sector worsened.

By the end of 2014 there were 22,709 bricks-and-mortar retail outlets for the butchery sector in Germany. This figure breaks down into 13,559 independent master butchers and 9,150 other outlets operated as branches alongside the main outlet.

2014 saw 1,114 closures and 730 openings. 340 of the latter were genuine new openings whereas 390 were accounted for by a change of ownership in an existing business. This reduced the number of independent businesses by 372, with 240 being lost in the first 6 months alone.

The long-term decline has therefore slowed considerably, as the sector association observed. The downturn affected nearly all German states. Last year it could be observed most prominently in Bavaria, Baden-Württemberg, North Rhine-Westphalia and Rhineland Palatinate.

In addition to the bricks-and-mortar stores or branches there were roughly 5,000 mobile retail outlets. In total, the butchery sector offers its customers just under 28,000 local stores and is by far the largest supplier group of meat and self-produced meat products in terms of numbers within the food retail industry.

The main reason for the downturn is the problem of finding suitable successors. Further reasons include competition-related factors such as market share being taken by supermarkets and discount stores, and long-term changes in buying habits which are leading to closures.

Location problems arise due to the deflection of consumer flows in the form of bypasses around towns or villages, for example, or the creation of new industrial areas for retail projects in city districts or suburbs.

In many cases, however, it is official requirements or other legal stipulations and examples of red tape which cause considerable increases in costs or necessitate significant levels of investment.

Recently the overall situation has been exacerbated for businesses by the acute shortage of trained staff and suitable apprentices.

The remaining businesses in the market are experiencing a long-term trend towards larger and more robust business units. Growth is being achieved through expansion of the business fields, specialisation and multi-branch operations.