Christmas shopping already in October
In the almost two years of the Corona pandemic, there have rarely been press conferences in which trade associations have expressed satisfaction with the financial situation of their industry. From this point of view, it was remarkable to see the outlook that the German Retail Association (HDE) gave on Monday for the end of the year. Despite the fourth wave, despite supply bottlenecks and high inflation, Germany's retailers expect record sales in the Christmas season. Revenues are expected to rise by 2 percent to 111.7 billion euros in November and December. Last year, the figure was only 109.5 billion euros, and by 2018, the last two months of the year still brought less than 100 billion euros into retailers' coffers.
Chief Executive Stefan Genth sees the high savings balances that people built up during the months-long lockdowns - and for which some banks are now charging penalty interest - as a key reason. "People didn't refuse to shop, they just couldn't," Genth said.
Now, however, consumers have a different problem: Because of global supply bottlenecks - from chip shortages to a lack of transport capacity - some shelves in the so-called non-food segment are empty. Many consumers have already started stocking up on Christmas gifts, he said. "We're seeing in certain products like toys and consumer electronics that October has been used." But there will still be a good offer in the Christmas business, Genth tried to reassure all those who have not yet been able to get hold of a Sony Playstation or Nintendo Switch.
The trade is concerned about the discussion on the introduction of stricter Corona measures in areas such as gastronomy, cinemas, and culture. In Saxony, 2G applies as of today, access only for vaccinated and recovered. Elsewhere, 3G now requires the more expensive PCR test instead of the rapid test.
Last November, he said, customer footfall in city centers fell by around 30 percent during the "lockdown light." "If measures are now enacted for the restaurant industry, this will, of course, have consequences for us as well," Genth said. He does not think it is necessary to extend the 3G rules to retail because of the mask requirement, distance rules, and hygiene concepts. "If 3G were to come, it would be a de facto lockdown." In the HDE's view, a renewed general lockdown in Germany would be disproportionate and unconstitutional, given that more than two-thirds of the population is vaccinated.
"The last two months are more important than ever for many retailers after the Corona lockdowns in the first half of the year," Genth said. According to the association's figures, typical gift industries such as toy retailers and jewelers make more than one-fifth of their annual sales in November and December."
According to an HDE survey of 450 companies across all sectors, size categories, and locations, 45 percent of retailers expect sales to increase compared with the previous year. One-third expect sales to remain stable. According to the survey, customers intend to spend an average of 273 euros, slightly more than in the previous year. Vouchers continue to be the most popular gift.
The association takes a critical view of the federal government's Corona aid. The fact that Bridging Aid III is only available from a 30 percent drop in sales is too high a hurdle for many retailers, it says. "This limit would have to be lowered." Genth also advocated extending the aid, which is currently limited until the end of December. "Until the end of March would certainly be moderate and good."