Is it worth the effort or not? With inflation, higher gas prices and e-commerce, shopping tourists are finding it harder to keep track. A search for clues in the border triangle.
People with full shopping bags are standing at the tram station of line 8 at the German shopping center Rhein-Center in the direction of Basel.
Wednesday lunchtime at the Lidl in Lörrach, Germany, on the border with Riehen, in the canton of Basel-Stadt. A couple from Riehen is filling their shopping basket. When asked if she always shops in Germany, the woman replies: “Yes, always and for a long time.” However, prices have increased significantly recently.
«Mozzarella cost 0.59 cents last week, today it is 0.79 cents. I do not understand that.” In fact, this is a price increase of 34 percent.
In the meantime, there are products in Switzerland at Prix Guarantee, Coop’s cheap brand, that are cheaper than in Germany. “You have to look carefully at what you buy.”
However, a direct comparison between Lidl Germany and Lidl Switzerland shows that the price level in Germany is still lower than in Switzerland, despite significantly higher inflation. The exchange rate also contributes to this.
Last week, the online bank Revolut charged 0.9718 francs for one euro with its debit card. In addition, you can reclaim the VAT of 7 percent (reduced tax rate for basic needs) or 19 percent when you buy for more than 50 euros.
“These are worlds – despite inflation”
Alex W from Basel comes from the drugstore chain Müller in the center of Lörrach. When asked if he is often here, he explains that he shops regularly in the German neighborhood and knows all the prices. Glass cleaners, detergents, refill packs, branded products and cosmetics are significantly cheaper than in Switzerland. “These are worlds, despite higher inflation.”
And then he fills up the tank of his car. Because of the German tank discount, you currently pay 1.83 euros for a liter of regular petrol compared to 2.14 francs in Switzerland. Diesel costs 1.97 euros in Germany and 2.33 francs per liter in Switzerland.
Although the overall price level in Germany is still lower than in Switzerland, significantly fewer Swiss people are coming to Germany than before the pandemic, says Hans-Werner Breuer, President of the Pro Lörrach Retail Association and Managing Director of the interior design business Becker. In fact, the traffic-free city center is not very busy on this day.
Breuer throws up his hands: “Yes, inflation has increased and is higher than in Switzerland, but a euro is worth less than a franc. The Swiss should actually stand in line, but unlike in 2015 they don’t come.”
Not comparable to 2015
In that year, the Swiss National Bank abolished the Swiss franc’s minimum exchange rate against the euro, causing the euro to fluctuate briefly around parity. However, the current situation differs from the situation in 2015. At that time, the franc appreciated sharply with a low inflation rate. The increased purchasing power of Swiss consumers abroad as a result of the appreciation of the Swiss franc is now being partially offset by higher inflation there. Valentino Guggia from BAK Economics in Basel points out that the increased fuel prices must also be taken into account when choosing where to shop.
Longer journeys would at least partially eat away at least part of what was saved by the lower prices. And in fact, you hardly ever see cars with Swiss license plates from cantons outside the region, as was the case in the past. The couple from Bern, who got out of the car in front of the Lidl, explained that they had visited their son, who works in Basel.
Almost a doubling of shopping tourism
And yet: If you look at the statistics, despite the aftermath of the pandemic and inflation, Swiss consumers’ spending at foreign retailers is likely to be above the pre-crisis level again. According to Meret Mügeli, economist at Credit Suisse, shopping tourism increased by 91 percent in the first half of 2022 compared to the previous year. This is shown by high-frequency data on purchases made by Swiss people with debit and credit cards in neighboring countries.
The statement thus contradicts the perception of numerous retailers surveyed in Lörrach. The pharmacist in the Hirsch pharmacy on the main shopping street regrets that “significantly fewer customers come from Switzerland. Unfortunately, this has changed since the pandemic.”
Business people in Lörrach have observed a clear decline in Swiss purchases across the border since the pandemic.
The seller of the bakery “Der Hausbäcker” in the entrance area of the food retailer Rewe says: “It’s not the same anymore. Since Corona, far fewer Swiss have come. You have probably noticed that it is also good to shop in Switzerland. Coop and Migros will be happy.”
In fact, Coop has noticed a “slowing down of shopping tourism” in the border regions due to the pandemic in the past two years. The spokeswoman Melanie Grüter is sibylline: “This year we are watching the development very closely.” It sounds similar at Migros. However, the two retail companies do not disclose figures that support the statements.
However, the discrepancy between perception and the statistics disappears when you look at the figures by country and price-adjusted.
In Italy back to pre-crisis levels
In Italy, Swiss debit card sales exceeded the pre-pandemic level in the past half year. But “according to our estimates, the other neighboring countries Germany, France and Austria are likely to be below the pre-pandemic level,” says CS economist Mügeli, adding: “This is particularly the case for Germany, where sales are estimated to be a fifth below the values of 2019.»
So that’s a minus of 20 percent and confirms that the Swiss have not yet returned in full. Valentino Guggia also points out that if you take price developments into account, real spending has not yet reached pre-crisis levels.
According to the Hochrhein-Bodensee Chamber of Commerce and Industry, Swiss people shopped for around 1.5 billion francs in the Lörrach, Waldshut and Konstanz districts in 2019. A drop of 20 percent amounts to 300 million Swiss francs.
The economists at BAK Economics estimate that price-adjusted shopping tourism in France has already exceeded the pre-crisis level, in contrast to their colleague at CS. This also explains the assessment of a customer advisor at the retail giant Casino in Saint-Louis in Alsace.
Few Swiss cars in the parking lot
Although he confirms that fewer Swiss consumers are shopping, he does not believe that the decline is as serious as his colleagues on the other side of the Rhine see it.
A look at Lörrach and Saint-Louis shows that, despite the stronger Swiss franc, the Swiss are not being driven to shop in neighboring countries to the same extent as before the pandemic. One reason might be that the high inflation rate of currently 8.9 percent in the euro zone compared to 3.4 percent in Switzerland deters many shopping tourists. Despite the high inflation, prices abroad can still be lower than in Germany. The more expensive journey due to the increased fuel prices should also deter many from shopping abroad.
In addition, Meret Mügeli from CS speculates that the behavior of Swiss consumers could have changed as a result of the corona pandemic – greater convenience with online shopping and rapid delivery, including in the food sector, may have contributed to this.