Germany: The Success of Neckermann's Pig

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The outraged Butchers' Guild of North Rhine-Westphalia in West Germany last week rallied under the slogan, "What's all this about the Neckermann pig?" Josef Neckermann, 54, the country's mail-order wizard, once again upset retailers, this time by offering through the mail half a pig for deepfreezing at half the price the pork would normally cost in the neighborhood butcher shop.

If the butchers didn't like it, other Germans did, and Neckermann is shipping out pig-halves at the rate of 600 a day from his Frankfurt headquarters.

This ferocious undercutting of competitors—"fighting the parasites who put prices up," Neckermann calls it—has been the key to the firm's extraordinary progress, from his first twelve-page catalogue to the slick 619-page book now circulating. In a country where retailers regularly mark up their goods 35% to 40% and sometimes even 100% , Neckermann makes do with a profit margin of 1% or 2%. His gross sales last year were $275 million.

Born in Würzburg, Neckermann worked in Berlin during the Nazi era, acquired for a bargain price a textile mail-order house belonging to a Jew who was forced to sell and flee. Neckermann joined the Nazi Party, did well selling uniforms to Hitler's armies during World War II. After V-E day, the Allies confiscated Neckermann's property and put him in jail for a year. He kept up his textile contacts and in 1950 set up business in a rented barracks at a refugee camp, where labor was especially cheap. He put out his first slim catalogue, and it brought him $2,400,000 in orders within eight months.

Breaking Boycotts. His success was so striking that in 1951 members of the German Association of Textile Wholesalers and Retailers met and agreed to boycott his suppliers. Neckermann sued, collected damages and broke the boycott. Then he began selling a quality radio for $45, when comparable sets were $75. He did the same with refrigerators, washing machines and TV sets. Again competitors moved to block Neckermann, each time helping to publicize his wares and prices. They did not stop him from getting supplies, but they did get repairmen to boycott Neckermann goods—with the result that Neckermann now has a chain of 115 repair shops, as well as 30 department stores, 79 smaller retail stores, two supermarkets and three mail-order centers.

"Der Boss," as he is known to his employees, spends ten or more hours a day in his Frankfurt office, decides everything down to the price of a handkerchief. Just about his only diversion is horseback riding, which he does so well that he won the world dressage championship in Bern last summer. Although the firm's shares are sold publicly—and will be listed this week on German stock exchanges—Neckermann and his family own 51.8% of the stock, and there are no other big shareholders.