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Business

Closing Too Early for Germany's Slumping Economy

With the economy in a bad slump, Germany's retail sector is suffering massively. The only way out, say advocates, is to let them keep their stores open later. But that's a sacred cow unions aren't ready to slaughter.

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A Saturday afternoon stroll down the Kufürstendamm, Berlin's busiest shopping street

Germany’s rush Saturday to get its shopping done before stores close at 4 p.m. belongs to one of the country’s most embedded weekend rituals.

Just as ritual are the German retail sector’s calls to stop it.

Looking back on what it calls the worst half year in German shopping since WWII, the German Retailers' Association (HDE) demanded Thursday the new government change Germany’s store operating hours law as soon as possible.

“We can’t afford to send customers home at 4 p.m. anymore,” said Hermann Franzen, president of German Retailer’s Association. “Two hours more time on the most important shopping day of the week – unions and industry should be able to compromise on this pragmatic proposal.”

Right now, stores are open until 8 p.m. during the week and until 4 p.m. on Saturday. Consumer and retail advocates said longer store hours are needed to turn around the downward sales spiral. Germany’s retail industry has made 10 billion euro less than last year, a decrease of around 4 percent.

“Longer hours would be a small economic program that won’t cost the government one penny,” said Holger Wenzel, also of the HDE, which is asking Saturday hours to be extended until 6 p.m.

An "absurd" law

The law is massively complicated, with loopholes allowing shops that sell certain items – like bathing accessories – to stay open later from Spring through Summer and allowing shop managers to keep the stores open as late as midnight as long as they’re the only ones working.

Retail and consumer advocates, as well as reform-eager economists have pointed to the law as everything wrong with Germany’s economic philosophy in the 21st century.

“The law is an absurd German ‘special way’,” wrote the Financial Times Deutschland recently. “Business needs more room to breathe.”

Unions say undue strain unecessary

Attempts to change the law in the past have always failed because of the unions’ strong resistance. The unions have argued that staying open later burdens the employees, who often have to work longer hours with a reduced amount of staff.

Union representative Franziska Wiethold questioned the motive of the industry associations’ latest plea to keep stores open longer.

“They just want to test to see how compromise-ready we are,” she told the "Berliner Zeitung". “But if we extend our little finger, they’ll take the whole arm.”

She said employees have a difficult time working Saturday, missing out on time free time and time with family. She added that the very reason stores give to stay open longer – more sales – has in the past proven false promises.

Germany first changed its rigid law in 1996, when it extended hours a store could stay open during the week to 8 p.m. and on Saturday, from 2 to 4 p.m. Rather than increase sales, Germany’s retail sector has suffered and cut jobs – with plans to cut 30,000 more in the coming year, according to the white collar union ver.di.

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