German retailers brace for the worst as COVID strikes again | Business | Economy and finance news from a German perspective | DW | 22.11.2021

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German retailers brace for the worst as COVID strikes again

Businesses have been struggling to recover from the first coronavirus-caused lockdown last year. The renewed rise in infections across Germany doesn't bode well for their trade. Hardy Graupner reports.

Wrapped Christmas trees

As regional lockdowns loom, will it be worth unwrapping these Christmas trees in a shopping mall in Strausberg?

Hours before the stores close here in this shopping mall in Strausberg near Berlin, there are hardly any customers left. This place has surely seen better times. Business has been sluggish ever since the coronavirus pandemic started.

One store owner in the mall is dreading the possible reintroduction of lockdown restrictions, which ravaged her business last year.

"When the first coronavirus lockdown hit us in 2020, we suffered badly," the boss of a Herzog & Bräuer lingerie store told DW. "The thing is that we really never fully recovered when it was over, the reason being that so many more people realized how convenient it is to shop online; so many just never returned to our brick-and-mortar shops."

In early November, the German Retail Association appeared confident that retail sales across Europe's economic powerhouse would increase by 2% in the November-December period, compared with the same two months last year. Revenues, the industry body predicted, would most likely come in at €112 billion ($126 billion) for those two months.

Based on the results of a recent poll, the association also said Germans would spend an average of €273 this year on Christmas presents, slightly up from last year's spending figures.

Only two weeks on, those forecasts are no longer worth the paper they're written on. A dramatic rise in COVID-19 infections across Germany has led to renewed restrictions which have already begun to pinch retailers in some states.

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De facto lockdown

The southern state of Bavaria has a de facto lockdown in place, resulting in the temporary closure of most retail stores. Saxony, in eastern Germany, has also imposed stricter measures that only allow fully vaccinated or fully recovered citizens to go shopping (grocery stores are not affected).

The COVID-19 situation is so dramatic that German Health Minister Jens Spahn has no longer ruled out a  complete nationwide lockdown. That is certainly something German retailers would hate to see.

A shopping center in Chemnitz, Saxony

Retailers and shoppers across Germany hope another nationwide lockdown can be avoided

In Strausberg, the lingerie shop owner said she was alarmed by the steep rise in COVID-19 cases and the restrictions customers would face.

"We haven't really stocked for the Christmas season as we don't expect a huge run on our shops in the weeks ahead because of all this coronavirus-caused uncertainty," she explained. "And had we decided to stock up, we'd certainly have faced some supply bottlenecks as markets are not yet back to normal."

A nearby vendor in an Ernsting's family store specializing in children's clothing hoped that people would still be able to shop in the weeks ahead.

"Of course, the first lockdown hit us hard, but we've managed quite well ever since," she said. "Children's clothes and toys are more or less crisisproof items, and even though many of our customers buy more online, they usually pick up their orders here in our store and buy something else while visiting."

Closed Christmas market stands

These Christmas market stalls in Potsdam were allowed to open on November 22

Discrimination or necessity?

Strausberg is located in the German state of Brandenburg which may follow the lead of other states and soon bar all those not vaccinated or recovered from COVID-19 from entering nonessential shops. The Ernsting's vendor didn't think much of such a policy, though.

"In my eyes, only letting in those who are fully vaccinated or recovered from COVID-19 would mean to discriminate against those who cannot be vaccinated for other health reasons," she argued, "and we shouldn't have an interest in splitting our society even further."

Her view was shared by the head of the Herzog & Bräuer lingerie store.

"Tightening current regulations further would be a slap in our face — we've really adhered to all the rules in place including distancing rules and mask norms, and we cannot afford to see our slim revenues shrink even more," she said. "There's no logic in restricting shopping again while at the same time allowing people to spend hours on packed trains or buses."

Saxony is different

Further south in the state of Saxony, coronavirus infections have gone up even more dramatically than in Brandenburg. The regional government has taken harsh measures like closing hotels and restaurants again and restricting shopping to those vaccinated against or recovered from COVID-19.

Two days before these measures went into effect, a huge shopping center in the Saxon city of Chemnitz was still bustling with customers who looked completely unfazed by any lurking health hazards.

A retailer in Chemnitz, Saxony

This vendor from Chemnitz, Saxony, said resourcefulness is necessary to ride out the pandemic

A couple running a stand full of wood-carved items told DW they wouldn't let their entrepreneurial spirits get dampened so easily.

"We've seen a remarkable tick up in trade and revenues since the last lockdown hit the country," the woman said. "So that's made up largely for the losses we incurred during the lockdown. And let's be fair — we received quite a bit of state aid to see us through."

Her companion said he wasn't afraid of more restrictions that may follow.

"You've got to roll with the punches," he said. "I can't understand the folks who rely so heavily on Christmas markets and Christmas season sales in general, that's a short-sighted approach, I believe."

The man explained that flexibility is required in case the situation worsens. "We've diversified our product range: That is, we're also selling food items now — and that you can always do, pandemic or no pandemic," he said.

Back in Strausberg, retailers appeared a lot more worried.

"Let's pray that we won't follow Austria's lead and impose a complete lockdown again," said one seller, in reference to Germany's neighbor, which introduced a full lockdown on Monday.

"Many retailers would most likely not survive that and would have to file for insolvency."

Edited by: Ashutosh Pandey