Politicians break their word: HDE fears up to 50,000 bankruptcies

Thursday February 11, 2021

Politicians "break their word"
HDE fears up to 50,000 bankruptcies

For large parts of the retail sector, the situation has darkened further with the latest Corona resolutions. The industry association rages against politics. This pursues a closure strategy. Without further help, tens of thousands of bankruptcies threatened. Sales would continue to decline.

The German Trade Association (HDE) accuses politicians of "breaking a clear word" after the latest Corona resolutions. "The retail trade has now been closed for eight weeks, a further four weeks are definitely inevitable," said HDE Managing Director Stefan Genth. "An opening strategy was not agreed yesterday, but a closing strategy." For the industry, the HDE now sees a decline in sales of six percent if it opens in May. "There can be well over 50,000 companies that will not survive this crisis if they are not adequately supported," warned Genth.

"The promise of a concept for a safe and fair opening strategy and thus for a transparent plan to restart the economy was frivolously broken," explained the association. Many retailers are in a hopeless situation. Therefore lawsuits are to be expected. Retailers lose around 700 million euros in revenue for each closed sales day.

Meanwhile, in an HDE survey, more than half of the retailers affected by the lockdown stated that they would not be able to survive the current year without further government support. "Smaller traders must be given the opportunity to pay out an entrepreneur's wages, and larger trading companies with an annual turnover of over 750 million euros must also receive support," demanded Genth. In addition, the depreciation options for the unsalable goods would have to be simplified and related to the complete seasonal goods.

For the sales development this year, the HDE gives several scenarios depending on the time of opening. You couldn't give a normal outlook "because we don't know what to do next," said Genth. For the retail sector as a whole, the HDE saw stagnation in sales when it opened in March, a decrease in sales of six percent when it opened in April and a decrease of six percent compared to the previous year when it opened in May.

For stationary retail, the association forecast a minus of two percent when it opened in March, six percent when it opened in April and nine percent in May. For online retail, growth of 13 percent is predicted for opening in March, plus of 14 percent for opening in April and 15 percent for opening in May. However, one has to see "that 2020 was already a year of crisis" so that this is not the normal basis.

This way of dealing with the approximately 200,000 retail companies affected by the lockdown is "inappropriate and incomprehensible". With its functioning hygiene concepts, the industry has demonstrably ensured that shopping is safe even in pandemic times. In addition, the HDE does not see a comprehensible basis for reopening stores with the new definition of the incidence number of 35. Even with higher numbers, retailers demand graduated procedures in which, for example, openings with stricter hygiene requirements or shopping by prior appointment should be possible.

The HDE managing director criticized that not only the now agreed incidence value of 35 is "arbitrary", but also that the doubling of the default retail space to 20 square meters lacks any scientific basis. The economy was not even heard, let alone involved, lamented Genth.