How the billion dollar market for drugstore chains is divided


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Status: 11.11.2021 12:42 p.m.

The business of drugstore chains like dm is booming. Which families are behind the success of the big dealers, how is the market divided – and where is the industry headed?

Dress up for the date, cat food is all and a quick print out a photo for grandpa: no problem, you can do all of this at the drugstore around the corner. The only question is: which one? dm, Rossmann, Müller – and not so long ago there were Schlecker and your place. In the north of Germany and in Berlin one also knows Budnikowsky, there mostly called Budni. Incidentally, it was the first of its kind, founded in 1912 by Iwan Budnikowsky in Harburg near Hamburg. His basic idea at the time was to sell soaps and cleaning products at low prices. Budnikowsky is now the smallest drugstore chain with just over 180 branches and is now owned by the Wöhlke family.

From the founder of a drugstore chain to the novelist

Family also plays an important role at Rossmann. Company founder Dirk Roßmann – the family name is spelled with “ß”, unlike the drugstore chain – handed over the business to his 36-year-old son Raoul Roßmann at the end of September 2021. Father Rossmann is currently working as a book author, which is also extremely successful financially. He can just afford to spend expensive advertising minutes right in front of the daily News to place; his net worth is estimated at $ 38 billion. And of course his books are also available in the roughly 4,000 Rossmann drugstores. But this is another story.

Striking: The drugstore giants in Germany were all founded by individual people, this applies to Rossmann, dm, Müller and once also Schlecker. Susanne Eichholz-Klein from the Institute for Retail Research (IFH) in Cologne has analyzed the history of drugstores: “The development of the currently leading drugstore concepts has been shaped by the signature of well-known entrepreneurs. This also applies to other retail formats and branches and is in line with the spirit of the times 1970s and the pioneering days. “

For Dirk Roßmann, the company was founded in 1972 in Burgwedel near Hanover. In 2020, the group turnover in its more than 4,000 branches across Europe rose to 10.35 billion euros, and throughout Germany to 7.33 billion euros. This is also due to the fact that drugstores in Germany never had to close during the Corona lockdown in 2020.

Special paths at dm and Müller

And the industry leader dm, based in Karlsruhe, also benefited from this. Dm was also founded by a distinctive entrepreneur: Götz Werner, a trained chemist, anthroposophist and supporter of the unconditional basic income, has now withdrawn from operational business. In 1973 he opened the first dm branch in Karlsruhe.

The price control for drugstore items had just been lifted, and Werner started with a classic discount store principle: self-service, high discount rates due to bulk purchases. In the early 1990s, Werner gradually changed the internal organizational structure. The branches were given more and more responsibility and self-control. Today, the local dm branches determine their product range, their duty roster, in some cases their superiors and even their salaries. The dm training concept is special: all apprentices complete a theater project during their training. With the support of professionals, they should learn team, communication and conflict skills.

That leaves number three of the German drugstores: Müller, which even has toys in its range. Meanwhile represented throughout Germany, Müller made 4.01 billion euros in sales in 2020.

Subscription models and refill stations

After the Schlecker bankruptcy in 2012, not much seems to be moving in the drugstore landscape, says Jörg Funder from the Institute for International Trade and Distribution Management at the University of Worms: “The large drugstore chains Rossmann and dm now have branches across Germany”, he explains. “The former north-south separation has been history at least since Rossmann’s expansion strategy and the departure of the competitor Schlecker with the subsequent takeover of branches by Rossmann and Edeka.

What future-oriented concepts could there be? “We will see many more intelligent subscription models in online trading that make everyday life easier,” said Eva Stüber from the Institute for Retail Research (IFH) in Cologne. “In stationary retail, the topic of sustainability takes up more space with refill stations and unpackaged goods. This serves the two major development drivers convenience and sustainability.”

Cosmetic products for filling: This is a little reminiscent of the forerunners of the drugstore: In the 19th century, chemists not only had medicinal herbs and medicinal drugs on offer, but also mixed toothpaste, toothpowder and skin cream themselves, in order to then sell them in small portions. It is very likely that the future will look the same again.

Reference-www.tagesschau.de

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