Saturday, January 02, 2021
Thousands of stores are threatened with extinction
Commerce is preparing for a long shutdown
The head of the trade association is under no illusions: An end to the lockdown is not in sight. The retailers urgently need more government help, says Stefan Genth. Otherwise, a huge wave of bankruptcies threatens.
The trade does not expect a quick end to the corona-related shop closings in Germany. "I'm afraid that the stores will not be allowed to reopen on January 10th. Because the goal of reducing the 7-day incidence nationwide to below 50 will probably not be achieved by then," said the general manager of the German trade association , Stefan Genth.
Retail feels left alone in the crisis. "The situation is really very serious," said Genth. "Federal Finance Minister Olaf Scholz always announces billions in aid, but the aid is not actually paid out because the access barriers are far too high." As a result, the retail trade does not have sufficient access to state aid.
A wave of retail bankruptcies looming over the next few months, Genth warned. Many trading companies that were affected by the double lockdown had largely consumed their equity and now needed economic support. Otherwise the end "for up to 50,000 transactions" threatens. The primary goal must be to reopen the shops as soon as this is possible from the virologists' point of view and then to keep them open. "We can't wiggle our way from one lockdown to the next. Thousands of retail companies, especially fashion houses, won't survive that," warned Genth. The retail sector has proven in recent months that open shop doors and fighting pandemics are not a contradiction in terms. Shopping is not a hotspot. The number of illnesses among employees in retail was at an inconspicuous level.
Tough competition on the internet
For industry insider Genth, one thing is certain that shopping will become more digital in the future. Many customers who previously did not shop online would have seen it work in the pandemic. The stormy change is not so easy to cope with for stationary retail. "Many retailers are currently trying to build up a second line of business on the Internet, but that is extremely difficult," Genth emphasized. The greatest difficulty for a dealer is to be found on the Internet. "In the city center it's about location, location, location. It's no different on the Internet. You have to be found and noticed."
For a medium-sized company, however, it is a great challenge to be even noticed in the race with large providers, explained Genth. Another big problem is the tough price competition that dominates everything on the Internet. The companies therefore needed state support. North Rhine-Westphalia with its digital coaches could be a model for this – consultants who go to companies and provide them with tailored support with digitization. "We could imagine that as a nationwide model with the support of the existing competence center for trade," said Genth.
Genth hopes that Sunday openings on some weekends could give retailers a little tailwind in the New Year. However, the legal requirements for this are still "absolutely unsatisfactory". In fact, retail Sunday shopping plans regularly fail due to legal objections from churches and trade unions. "We need an exemption here. For clarification, we only see the way via a constitutional complaint to the Federal Constitutional Court," said Genth. The only alternative to this would be a clarification by the legislature, but this would require an amendment to the Basic Law.
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