Wednesday, February 29, 2012

Schlecker Chaos

Across Germany, the word got out....Schlecker, the non-drug-store store is about to downsize drastically.  You can figure half the 6k shops will shut down and just over 15k employees will be let go.

For an American, Schlecker takes a brief moment to explain.  This was the miniature store in every small town and neighborhood in Germany....that sold everything a drug store sold, except drugs.  They had the shampoo, the soap, the various articles that you'd need for your beauty or your bathroom.

If you go back....this was a small enterprise that started up in the mid-1970s.  They would find a small shop in neighborhoods and hire up a couple of part-time ladies to run the basic shop.  You had usually two full-time folks to keep the books and ensure smooth operations.

There were a couple of observations that I could make over the operation.  I suspect around the 1990s....when real department stores started to pop up in most sizable cities.....that really cut into the business empire of Schlecker.  If you bought everything at the big store....why shop at the mini-shop?

The part-time pay scale?  Lousy, and a number of people often complained about this angle to the operation.  If you complained in front of the manager, then you tended to get booted out quick.  Over the past decade, a number of villages started to have major negative reviews of their local Schlecker because their favorite clerk got fired or terminated.  That didn't help the business angle much.

Finally, you come to the profit margin deal.  By the time that the big companies gave their best deal to the big stores.....I doubt if Schlecker could ever get much of a special cost deal.  With crappy profits, they were begging for closure.

While half the shops remain.....if I were a betting person.....I'd wager the remaining shops all close within a decade.

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