MediaMarket and Saturn are hard to imagine German city centers without. Now both electric giants are supposed to close several branches. Almost 1,000 employees are said to lose their jobs. The parent company Ceconomy - to which MediaMarket and Saturn belong - is planning not only tough cost-cutting measures but also extensive
changes in the stores themselves, which also affect customers.
The lockdown changes the core business for Media Market and Saturn. Customers cannot shop in the branches, they prefer to shop online. This trend could change shopping behavior in the longer term. In order to prepare for the future, the two electric giants are now apparently planning tough cuts, reports the "Lebensmittel Zeitung".
The management discusses the current development in an internal letter. The basic tenor: the stores are suffering from the ongoing lockdown. For cost reasons, branches should therefore be closed. By the end of September there should be 13 stores that will be closed. Media Market and Saturn have meanwhile confirmed the plans on request. Almost 1,000 employees are to be laid off because of "inevitable downsizing".
Saturn and Media Market operate a total of 419 branches in Germany. In the past few months, the company had already closed six branches. In July 2020, the branch network still comprised 425 branches.
MediaMarket and Saturn also want to downsize branches
The branch areas are also to be reduced overall in order to achieve a "significant reduction in rental costs". According to CHIP information, the focus is on larger shopping centers and arcades, in which Media Markt and Saturn are among the most important tenants.
According to an insider, the aim is to be able to release the rental space without major renovations. In addition, branch space could be rented to smartphone manufacturers and telecommunications services. It is possible that Telekom, Vodafone, O2, Xiaomi or Samsung shops move in at Media Market and Saturn.
The downsizing, the branch closings and the smaller branches are by no means surprising. It was already known in August that Media Market and Saturn wanted to implement a tight savings program.
4,000 jobs should be cut across Europe, national companies should be eliminated and merged. This alone should save expensive manager posts. "In view of the declining customer footfall as a result of the Covid19 pandemic, the group is also looking into closing deficit stores to a limited extent," it said at the time.
According to media reports, Ceconomy wants to concentrate on the core brand Media Market in Europe. In fact, more and more Saturn branches abroad have been renamed in recent years. In Germany, the parent company (still) adheres to the two-brand concept.
What does this mean for customers?
As employees explain, Media Market and Saturn focus on the bestsellers in the branches. Customers should find a tighter electrical range. However, the offer is to be supplemented by online trading.
Instead of 30 variants of washing machines and coffee machines, there should be a significantly lower range. Instead, Media Market wants to use branches to bring brands and functions closer to customers. Before the Corona crisis, the company worked on courses for digital photography, smartphone use or setting up computers. Customers should book their participation for a fee.
The markets should continue to play an important role in the strategy. "We must and will adapt to the changed customer behavior," said Ceconomy boss Bernhard Düttmann last summer.