Discount Retail non-food variety Chains are growing significantly and have recently chased sales away from the classic food discounters Lidl and Aldi. What is the focus of their business models and who is behind the brands with thousands of stores in German cities?
The times when every product cost only one euro in the cheap shops are over. Inflation has not stopped at the ultra-cheap non-food discounters, where the goods often cost significantly more. In addition, there is now a much larger selection of products in the numerous sales outlets. In addition to classic household goods, cosmetics, toys and stationery, gifts and decorative items, there are also many seasonal products for home and garden.
The expansion of the range to basically everything that cannot be consumed does not change the popularity of these shops, which can be found in every major city. Quite the opposite: In recent years, sales have been growing in the markets that have established themselves as a real alternative in the non-food sector alongside classic food discounters such as Aldi or Lidl. The total turnover of the low-cost chains, which import most of their goods from China and other low-wage countries, rose from 2.6 to 3.2 billion euros between the first half of 2022 and 2024.
The low-cost chains are likely to have chased part of the business away from the classic discounters. In the same period, Aldi and Lidl lost half a billion euros in the non-food sector, according to calculations by market researcher Consumer Panel Services GfK; they generated sales of around 3.5 billion euros in the segment. The cheap markets, once ridiculed as junk shops, have thus become a permanent fixture in the German retail trade. The overview shows who is behind it.
Tedi
The market leader among the non-food discounters in Germany is Tedi, the abbreviation stands for "Top Euro Discount". In 2003, the first branch was opened in Hagen, and the Dortmund-based company now has more than 1900 sales outlets in Germany alone, with a total of 3200 stores in 15 European countries. In the medium term, the number of branches is even expected to increase to 5000. In August 2023, Tedi also acquired more than 40 stores of the French discounter Max Plus. With 35,000 employees across Europe, Tedi is aiming for sales of around 3 billion euros in the current fiscal year (until April 30, 2025).
Of the approximately 15,000 items that can be bought at Tedi, more than 3000 products cost only one euro or even less. In addition to many branded products, Tedi also has its own brands. Tedi also offers cheap clothes. However, an existing online shop was closed again in 2022. You can look at the goods online, but when it comes to sales, Tedi is once again completely relying on the sale of goods in its stores. Walk-in customers play an important role in this, which is why most Tedi stores are located in shopping centers or pedestrian zones.
Behind Tedi is Jost-Stefan Heinig (62), one of the most successful and at the same time least known entrepreneurs in Germany. In the 90s, he opened the first store of the textile discounter KiK, in which he is no longer involved. 20 years ago, the company started with Tedi, initially as a Tengelmann subsidiary. With his low-cost companies, Heinig built up a fortune of around 3 billion euros, making him 80th in the richest list of manager magazin. Since September 2023, Tedi's CEO has been Petar Burazin, who is to further drive the company's expansion.
Action
The currently fastest growing non-food discounter in Germany is Action, a wholly owned subsidiary of Action Holding B.V. from the Netherlands. Launched there in 1993 and then in 2009 with the first German branch, the Düsseldorf-based company currently has 550 sales outlets in this country. Across Europe, there are currently 2755 stores in twelve countries, and 1400 more locations are to be added by 2026. The Action Group, which is majority-owned by the British financial investor 3i, is also particularly well represented in France.
In the Action stores, there are often special item markets with a focus on topics such as furnishings or "Do It Yourself", as well as numerous consumer goods. In total, Action currently offers around 6000 items, including more than 1500 products in the price segment up to one euro. Only about a third of the range is part of the permanent range, including numerous premium and private labels. The current CEO Hajir Hajji (43), who started as a cashier at the company at the age of 17, likes to describe the constant change in his range, there are 150 new products every week, as an "action formula".
In the first nine months of the year, Action Holding B.V. was able to increase its sales by around 20 percent to 9.6 billion euros. Since Action lowered the prices of around 4000 products in 2023 and 2024, the sales growth can be attributed primarily to an increased number of customers. A total of 74,500 employees currently work for the company throughout Europe.
Woolworth
Like Tedi, Woolworth is also part of Jost-Stefan Heinig's corporate empire. The history of the general store goes back a long way. As early as 1927, the German subsidiary of the American F.W. Woolworth Company opened its first store in Bremen. Shortly afterwards, a shop opened in Berlin that advertised for customers with the statement "Nothing over 50 pfenning". In the company's rapid history, a rapid rise, financial difficulties and several changes of ownership followed over the decades.
After insolvency, Woolworth GmbH was re-founded in Germany in 2010. The company, based in Unna, North Rhine-Westphalia, has a standard range of 10,000 items and focuses on local stores in city centres and district and shopping centres. "Woolworth wants to show its colors locally instead of doing faceless e-commerce," it says on the company's homepage. About 90 percent of the items are private labels. Around 6000 products cost less than three euros at Woolworths, and the company currently operates 750 stores with more than 10,000 employees, most of them in Germany. In addition, there are locations in Poland and Austria.
Similar to Tedi, owner Heinig is also pursuing ambitious goals with Woolworth, and in the medium term he plans to open 5000 stores throughout Europe. However, since the beginning of the year, the investment bank Rothschild has been looking for possible interested parties for Woolworth. The company is currently led by Roman Heini (48), a long-time Aldi manager, who also has a 2 percent stake. The Acition investor 3i is said to have been interested in a purchase, but the plan is said to have been shattered, according to the "Lebensmittelzeitung".
Thomas Philipps
The company, founded in 1986, is positioning itself as a non-food discounter primarily for home and garden items, with the same name as its founder: Thomas Philipps. The family-owned company from Bissendorf in the district of Osnabrück now has more than 250 stores in Germany, as well as branches in Lithuania and Austria. Originally starting with the sale of special items, Thomas Philipps now has around 18,000 items in its range, including plants and flowers, camping articles, tools as well as car and bicycle accessories.
In the meantime, the third generation of the Philipps family is at the helm. The company employs around 800 people, mainly in administration and logistics. In addition, there are 3500 employees in the individual markets, where the company relies on independent market partners. According to the company, they are free in personnel management and also flexible in merchandise scheduling for the respective location of the store. In addition, Thomas Philipps also relies on an online shop where you can find around 2500 products from the entire range.
Schum Euroshop
After the renaming of "Knüllerkiste" to "Euroshop", the name was the program for a long time and ensured a high level of awareness: Each item cost only one euro here. But since 2020, the alleged unit price in the 350 Euroshop stores for the approximately 2000 non-food products has been 1.10 euros, but individual goods currently cost 1.50 euros. The company, whose origins as a hardware store dates back to 1877, is focusing on rather restrained growth, CEO Rainer Schum wants to remain a family entrepreneur in the fourth generation.
Euroshop promises to comply with certain quality criteria and the legal requirements regarding product safety with its range of around 5000 items. "It can't be junk. We have to convince with quality," it says on the company's homepage. This is how they want to distinguish themselves from item dealers. Euroshop reaches around 250,000 customers every day.
Read more: Tedi, Action, Woolworth, Euroshop, Thomas Philipps: Who owns Germany's cheap markets - manager
