Ulf Ohlmer, President and Thomas Grothkopp, general Manager of the BBW took the opportunity of Paperworld to draw a clear statement of the German market in stationery and office supplies branch.
On a general scale, Germany had good growth in the last 12 months of +2.5. This reached the same level as 2006. The number of workers has been estimated at 40 million persons in the whole country. “White-collar” workers have increased to 20 millions out of 17 millions, which was the estimated figures beforehand.
For the BBW, the market is dividing into two with direct sales, ie. sales made by contract stationers, mail orders, office dealers operating without shops, that represents 60% of the market and the retail market (not including hypermarkets and supermarkets ): 40%.
+3% growth for direct sales outlet...
As for retail sales, experts revealed a small 1% increase in 2007, to reach 3,087 million euros. In a country with a 3% inflation rate last year, this shows a slight decrease in fact of the individual retailer outlet. In comparison with other traditional retail outlets in other industries, this trend is however OK.
For the office furniture sales in particular, growth has been much higher with +14% (+5% in 2006).
What happened there !? In fact, since 2001, the market has shrunk a lot. Today we are just recovering up to the 2002 The recovery is on its way, with a lower number of office furniture dealers. Its number is estimated now between 800 and 900.
In office machine branch, growth has been neutral in 2007. However the black and whited printers have decreased and colour printers increased. Colour represent now 25% of the new machines sales. 270.000 machines have been sold in 2007.
Private consumption is still flat...
With a small +1%, private consumption has recorder a very slight increase. Sales through traditional sales is however considered as a key element by German manufacturers who recognize their expertise to better know their customers , to better explain and demonstrate the products. Manufacturers see with an optimism the recent +1% rise in the traditional workers number (full-time).” More full time employees in shops mean better trained people to sell manufacturers brands”.
Evolution of sales seemed to be better in the 100.000+ cities, where point of sales developped a more “emotional” shopping experience. In comparison, retail shops that haven’ moved from their standard assortment are recording poor results.
Big players in distribution are working everyday to try to make some savings in operation costs in Germany. As an example, Lyreco has launched a project to bring together its warehouse facilities and administration center in the same location in Hannover. This building should be over in 2010. Rationalising the costs is certainly one good motivation, another one could be to better operate on neighbour areas and countries. Some professionnals in the industry believe that Lyreco has intented to takeover a Russian partner recently without success, yet !
Concerning the buying groups like Sonneken , Buroring, their efforts are focused in marketing development. Members are pushed to choose in two orientations: a price-oriented policy or a “main-street” point of sales with more services, emotional aspects and higher quality assortment. It seems more an more that the standard assortment with standard price does not have any future.
2008 should be more difficult...
For BBW experts, 2008 should be on the same level of 2007. Different promotion plans has been initiated to enable brands promotion and a support for retail outlets. However, the financial crunches that hit stock exchange markets in the last days should impact our industry too.
Suppliers who have met today have underlined the rising costs of raw materials (steel and oil specially). The new system of taxes decided by Chinese government depending on the produsts would also be of importance, these elements together with financial crisis should lead to a growth around 2% in 2009.