Organic market crisis: Whole food stores are closing in droves in SH!

Organic market crisis: Whole food stores are closing in droves in SH!

The landscape of natural food stores in Schleswig-Holstein is changing rapidly. Since 2022 in particular, around 15 percent of owner-managed organic markets have had to close their doors, a trend that has even reached 20 percent nationwide. The reasons for these unpleasant developments are manifold. One of the main factors is the uncertain succession of stores and rising personnel costs, which are particularly placing a heavy burden on smaller and owner-managed businesses. This reports NDR.

But the competition doesn't sleep either: supermarket chains and discounters have massively added organic products to their range in recent years. This means that many consumers prefer to go to mainstream providers when shopping, especially in times of inflation when saving is the top priority. According to NDR, many customers look for a good price-performance ratio when buying organic food. One example of this is the Klostersee farm shop, which has specifically noticed that consumers are increasingly paying attention to the price when purchasing organic products.

The dynamics of the market have also changed in recent years. The industry's keen observers see that organic products such as fresh fruit and vegetables are in lower demand, while longer shelf life products such as pasta and ready meals are seeing notable growth. The approximately 5 percent increase in sales of the German organic market in 2023 also shows that, during the crisis, many consumers still value valuable products Süddeutsche.

Challenges and opportunities for natural food stores

Despite the challenges, there is a light at the end of the tunnel. Organic stores should increasingly market themselves via social media and storytelling to appeal to younger target groups. The Demeter baker Dirk Öllerich, who has recorded stable sales of organic bread, also sees a need for new ways of marketing in order not to be lost in the competition.

For the Landwege cooperative in Lübeck, which recently had to close a branch, adapting to the market is an urgent necessity. Members emphasize the importance of facing changes in the organic market and finding innovative ways to reach customers. Martina Andres from Landwege notes that the number of employees in natural food stores is often higher than the number of customers, which further increases the financial burden.

Smaller towns are significantly more affected by the closures. In these regions there is often a lack of interest in investing in organic stores when discounters and large chains already have so many offers. Consumers are willing to pay more for quality food, but only when the circumstances are right. A major problem is the lack of staff, which also jeopardizes the quality of advice in natural food stores, as many businesses have difficulty finding qualified staff.

Looking into the future

The prospects for a market recovery also appear to be in sight with recent sales increases. Despite high inflation, which pushed the market into negative territory for the first time in 2022, the first nine months of 2024 show total sales growth of over five percent. Does this mean that interest in organic food is returning to its good old form? This question remains exciting and requires constant observation of market events in order to identify trends at an early stage and react accordingly.

A positive development can be seen, for example, at the Schwammerl organic shop in Erbendorf, which only opened in March 2023. Michael Wildenauer, the owner, brings a breath of fresh air to the industry with a clear focus on regionality and offers a selection from Bavaria or Germany. He already supplies four kindergartens and is active in the community, which has resulted in a 20 percent increase in sales this year. Despite the success, finding personnel remains a challenge, as he also has difficulties recruiting mini-jobbers with specialist knowledge. But his commitment and the support of volunteers show that with a good hand and a regional connection you can be successful even in stormy times.