Despite declining consumer spending, Germans are still shop-a-holics at heart and stocking up on basics during the annual winter clearance sale – the last of its kind, thanks to changing retail laws.
Twice-yearly sales will soon give way to year-round savings.
It's the end of a retail era in Germany as the last of the official twice yearly clearance sales, the "Schlussverkauf," got underway on Monday. Soon, price-conscious German shoppers will be free to hunt for bargains year round: A revised law on clearance sales will go into effect this spring, putting an end to the current system, which prohibits stores from offering goods at bargain basement prices outside of the legally-mandated sale periods.
But will shoppers emerge with the same sense of victory if they no longer have to line up outside the shop doors in the wee hours of the morning and trade elbow jabs with other would-be bargain hunters?
Times they are a changing
In 2003, the German Bundestag voted to revise the nearly 100-year-old law, which restricted retailers of mostly clothing items from holding clearance sales except during twice-yearly two week periods – one in January and one in July.
Retailers had lobbied hard for more freedom to lure in shoppers as the German economy is in the doldrums and consumer spending declining – sales of merchandise other than food dropped for the second year in a row by 2.1 percent, according to the Federal Statistics Office.
The revised legislation on clearance sales is the latest in a series measures aimed at loosening Germany's restrictive retail laws. Also in 2003, the Bundestag voted to allow stores to stay open an extra four hours on Saturdays, until 8 pm.
A “fireworks of savings”
Despite the general downward trend in consumer spending, this last winter clearance is off to a good start. Department stores flung open their doors earlier than usual, allowing hundreds of shoppers, many of whom had been waiting in long lines for several hours, to stream inside. There, retailers already expected them with a “fireworks of savings,” according to Hubertus Pellengahr, a spokesperson for the Association of German Retailers.
Hyperbole aside, discounts of up to 50 percent seem to be working: Sales are up by 3 to 4 percent compared to last year, according to Harald Lemke, the manager of a department store in Brandenburg.
The real test of the change will come later this year, when German consumers will have to acclimatize to the change. Will they still show up in the same droves when the frenzy and finite time-frame surrounding the official "clearance sales" gives way to somewhat more subdued and lower-key year round savings?
German retailers are hoping the German tendency to bargain hunt is not limited to certain times of the year.