Written by
Reinhard Winiwarter /// Publisher & Managing Partner of ACROSS Magazine
For years, the European retail debate has revolved around one seductive formula: “experience per square meter.” Conferences celebrate curated assortments, in-store cafés, immersive lighting concepts and community hubs. Consultants present causal models linking atmosphere to dwell time, dwell time to conversion, conversion to loyalty.
These dimensions do matter. But only within a coherent economic model.
The hard economic truth is this: in times of inflation, real wage losses and geopolitical uncertainty, the decisive ‘experience’ for the broad middle class is price.
Experience is not a substitute for price logic. It is an amplifier. And it only works when the underlying positioning is economically credible. Where margins allow for radical emotionalization, experience becomes a strategic asset. Where they do not, it risks becoming a costly illusion.
We are witnessing a radical polarization of retail. At one end, uncompromising luxury; at the other, uncompromising discount. In between lies a shrinking space that used to be the proud backbone of European high streets: the middle.
The rise of discount
Look at the numbers. Action expanded its store network in 2025 by 384 units, reaching 3,302 stores in 14 countries. Revenues climbed to €16 billion, with more than 21 million customers per week. The company opens more than one store per day. This is not marginal growth. This is systemic dominance.
Woolworth reopened and accelerated in Austria with 48 new stores in one year, operates over 800 in Germany and is targeting 5,000 across Europe mid-term. In Austria alone, it plans at least 250 locations. Its promise is disarmingly simple: everyday products, low prices, broad accessibility.
Pepco celebrated the opening of its 4,000th European store in 2025 and continues to expand across 18 countries. Even Zeeman, with more than 1,300 stores, adds around 50 locations annually. These are not isolated cases. They represent a structural shift.
Meanwhile, total retail space in markets like Austria has been shrinking for years, by roughly 280,000 square meters per year over the past decade. The contraction is not evenly distributed. Top locations remain comparatively stable; weak and mid-tier zones are hollowing out. Vacancy rates in secondary high streets are climbing into double digits.
Who is filling prime locations that used to be reserved for aspirational brands? Increasingly, discounters.
The true story
This is the true story behind the rhetoric of “experience per square meter.” The landlords of shopping centers and high streets do not lease to atmosphere. They lease to frequency. A discounter with relentless footfall and stable turnover is, in many cases, a more attractive tenant than a beautifully staged mono-brand store with volatile conversion rates.
The industry’s expert bubble is not hypocritical; it is simply describing the upper end of the hourglass. For luxury brands, experience is not optional. It is existential. Radical emotionalization justifies radical margins. Flagship stores as temples of brand identity make sense when a handbag costs €2,000.
But the middle market cannot win that game.
It cannot emotionally outspend luxury, nor can it operationally undercut discount. It is trapped in a strategic no-man’s-land. If it invests heavily in design, gastronomy and events, it inflates its cost base without achieving premium pricing power. If it cuts prices, it erodes margins without the scale and efficiency of true discounters.
The result is predictable: erosion.
It’s about the price, stupid
We like to say that stationary retail is becoming part of the experience economy. But the data tells a more nuanced story. Yes, consumers spend more on gastronomy, leisure and services. But this shift does not automatically translate into retail stores becoming playgrounds. Often, it means the opposite: less discretionary budget for mid-priced goods.
In this environment, the “treasure hunt” of discount is not a lack of experience. It is a highly effective, economically grounded experience. Action rotates roughly 150 new items per week. Two-thirds of its assortment costs less than €2. This constant novelty at minimal financial risk triggers repeat visits. The dopamine kick is real and affordable.
Discount has mastered what many mid-market brands ignore: price image. It is not about being the cheapest on every SKU. It is about being perceived as trustworthy, consistently affordable, and uncomplicated. Once customers believe in that promise, frequency follows. Frequency drives productivity per square meter more reliably than curated storytelling corners.
Outlet’s winning formula: brand + price = success
This polarization is not limited to high streets. It is equally visible in the flourishing outlet center industry.
According to Savills, investment volume in European factory outlet centers reached €653 million in the first half of 2025 alone — 3.2% of the entire retail investment market, well above the ten-year average of 1.8%. By August, the volume had already surpassed €1 billion. Yields between 6% and 7% remain attractive, and investor appetite is rising.
More telling is the demand from brands. Since mid-2023, nearly 600 new outlet stores have opened across Europe. Rituals, Jack & Jones, Under Armour, Swarovski, Skechers — all expanding their outlet presence. Germany ranks as the most attractive expansion target, followed by Spain, France and the UK.
Why this momentum?
Because outlet centers resolve the very dilemma that is crushing the middle. They combine brand aspiration with price credibility. In uncertain times, this hybrid model becomes highly compelling: aspirational consumption with economic justification.
Even here, operators are investing in “experience” — refurbishments, pop-ups, sustainable design, gastronomy. But the core driver is not ambience alone. It is branded value. The promise is clear: premium labels at reasonable prices. Experience enhances the visit; price legitimizes it.
The hourglass shape of retail is therefore becoming more pronounced. Luxury at the top, discount and outlet at the base — both thriving for different reasons, yet united by strategic clarity.
Unforgiving market, undeniable truth
The middle once thrived on aspiration within reach. Today, aspiration has split. Those with purchasing power gravitate to luxury and authenticity. Those under pressure gravitate to price. The broad center, squeezed by rising costs and limited differentiation, is losing ground. The middle struggles with ambiguity. It is neither sharply priced nor radically emotionalized. And markets are increasingly unforgiving toward ambiguity.
This does not mean physical retail is dying. On the contrary: discounters prove its vitality. Luxury proves its resilience. What is disappearing is mediocrity.
If you do not radically emotionalize, you must radically economize. Everything in between is being rapidly and efficiently occupied by discount formats.
The end of the middle is not a cultural tragedy. It is an economic consequence. Price is not defeating experience because consumers have become unimaginative. Price is winning because, for a large part of society, it is the most honest experience retail can offer right now.
And no KPI model, however sophisticated, can override that reality.
The End of the Middle: Why Price Is Beating Experience
Retail is not dying — it is polarizing. While the industry debates atmosphere and community, consumers are voting with their wallets. In uncertain times, price is the most powerful experience driver — and the middle of the market is paying the price.
Written by
Reinhard Winiwarter /// Publisher & Managing Partner of ACROSS Magazine
For years, the European retail debate has revolved around one seductive formula: “experience per square meter.” Conferences celebrate curated assortments, in-store cafés, immersive lighting concepts and community hubs. Consultants present causal models linking atmosphere to dwell time, dwell time to conversion, conversion to loyalty.
These dimensions do matter. But only within a coherent economic model.
The hard economic truth is this: in times of inflation, real wage losses and geopolitical uncertainty, the decisive ‘experience’ for the broad middle class is price.
Experience is not a substitute for price logic. It is an amplifier. And it only works when the underlying positioning is economically credible. Where margins allow for radical emotionalization, experience becomes a strategic asset. Where they do not, it risks becoming a costly illusion.
We are witnessing a radical polarization of retail. At one end, uncompromising luxury; at the other, uncompromising discount. In between lies a shrinking space that used to be the proud backbone of European high streets: the middle.
The rise of discount
Look at the numbers. Action expanded its store network in 2025 by 384 units, reaching 3,302 stores in 14 countries. Revenues climbed to €16 billion, with more than 21 million customers per week. The company opens more than one store per day. This is not marginal growth. This is systemic dominance.
Woolworth reopened and accelerated in Austria with 48 new stores in one year, operates over 800 in Germany and is targeting 5,000 across Europe mid-term. In Austria alone, it plans at least 250 locations. Its promise is disarmingly simple: everyday products, low prices, broad accessibility.
Pepco celebrated the opening of its 4,000th European store in 2025 and continues to expand across 18 countries. Even Zeeman, with more than 1,300 stores, adds around 50 locations annually. These are not isolated cases. They represent a structural shift.
Meanwhile, total retail space in markets like Austria has been shrinking for years, by roughly 280,000 square meters per year over the past decade. The contraction is not evenly distributed. Top locations remain comparatively stable; weak and mid-tier zones are hollowing out. Vacancy rates in secondary high streets are climbing into double digits.
Who is filling prime locations that used to be reserved for aspirational brands? Increasingly, discounters.
The true story
This is the true story behind the rhetoric of “experience per square meter.” The landlords of shopping centers and high streets do not lease to atmosphere. They lease to frequency. A discounter with relentless footfall and stable turnover is, in many cases, a more attractive tenant than a beautifully staged mono-brand store with volatile conversion rates.
The industry’s expert bubble is not hypocritical; it is simply describing the upper end of the hourglass. For luxury brands, experience is not optional. It is existential. Radical emotionalization justifies radical margins. Flagship stores as temples of brand identity make sense when a handbag costs €2,000.
But the middle market cannot win that game.
It cannot emotionally outspend luxury, nor can it operationally undercut discount. It is trapped in a strategic no-man’s-land. If it invests heavily in design, gastronomy and events, it inflates its cost base without achieving premium pricing power. If it cuts prices, it erodes margins without the scale and efficiency of true discounters.
The result is predictable: erosion.
It’s about the price, stupid
We like to say that stationary retail is becoming part of the experience economy. But the data tells a more nuanced story. Yes, consumers spend more on gastronomy, leisure and services. But this shift does not automatically translate into retail stores becoming playgrounds. Often, it means the opposite: less discretionary budget for mid-priced goods.
In this environment, the “treasure hunt” of discount is not a lack of experience. It is a highly effective, economically grounded experience. Action rotates roughly 150 new items per week. Two-thirds of its assortment costs less than €2. This constant novelty at minimal financial risk triggers repeat visits. The dopamine kick is real and affordable.
Discount has mastered what many mid-market brands ignore: price image. It is not about being the cheapest on every SKU. It is about being perceived as trustworthy, consistently affordable, and uncomplicated. Once customers believe in that promise, frequency follows. Frequency drives productivity per square meter more reliably than curated storytelling corners.
Outlet’s winning formula: brand + price = success
This polarization is not limited to high streets. It is equally visible in the flourishing outlet center industry.
According to Savills, investment volume in European factory outlet centers reached €653 million in the first half of 2025 alone — 3.2% of the entire retail investment market, well above the ten-year average of 1.8%. By August, the volume had already surpassed €1 billion. Yields between 6% and 7% remain attractive, and investor appetite is rising.
More telling is the demand from brands. Since mid-2023, nearly 600 new outlet stores have opened across Europe. Rituals, Jack & Jones, Under Armour, Swarovski, Skechers — all expanding their outlet presence. Germany ranks as the most attractive expansion target, followed by Spain, France and the UK.
Why this momentum?
Because outlet centers resolve the very dilemma that is crushing the middle. They combine brand aspiration with price credibility. In uncertain times, this hybrid model becomes highly compelling: aspirational consumption with economic justification.
Even here, operators are investing in “experience” — refurbishments, pop-ups, sustainable design, gastronomy. But the core driver is not ambience alone. It is branded value. The promise is clear: premium labels at reasonable prices. Experience enhances the visit; price legitimizes it.
The hourglass shape of retail is therefore becoming more pronounced. Luxury at the top, discount and outlet at the base — both thriving for different reasons, yet united by strategic clarity.
Unforgiving market, undeniable truth
The middle once thrived on aspiration within reach. Today, aspiration has split. Those with purchasing power gravitate to luxury and authenticity. Those under pressure gravitate to price. The broad center, squeezed by rising costs and limited differentiation, is losing ground. The middle struggles with ambiguity. It is neither sharply priced nor radically emotionalized. And markets are increasingly unforgiving toward ambiguity.
This does not mean physical retail is dying. On the contrary: discounters prove its vitality. Luxury proves its resilience. What is disappearing is mediocrity.
If you do not radically emotionalize, you must radically economize. Everything in between is being rapidly and efficiently occupied by discount formats.
The end of the middle is not a cultural tragedy. It is an economic consequence. Price is not defeating experience because consumers have become unimaginative. Price is winning because, for a large part of society, it is the most honest experience retail can offer right now.
And no KPI model, however sophisticated, can override that reality.
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