41.000 shops in Germany closed during the pandemic
More figures are beginning to emerge which illustrate the true impact that the coronavirus pandemic has had on parts of German society. According to new data, the retail sector has lost 41.000 shops.
41.000 shops close across Germany
According to Alexander von Preen, president of the German Retail Association, Germany has lost around 41.000 shops since 2019. Prior to the coronavirus pandemic and the restrictions it brought with it, Germany would lose around 5.000 shops per year to closure.
Speaking to Berliner Morgenpost von Preen explained that following a spike in retailers moving online during the pandemic, online turnover is starting to slow. In 2022, 13,5 percent of all retail sales happened on the internet. Though these percentages are only expected to rise, numbers also differ significantly in different retail areas. 50 percent of textiles in Germany, for example, are already sold online.
Energy crisis hits German retail sector
In Germany, 2022 saw coronavirus qualms retreat and uncertainties over Putin's invasion of Ukraine - and the consequent European energy crisis - take the virus’ place in the country’s consciousness. Germany’s 65-billion-euro relief package will grant small businesses cheaper rates following the gas price cap, intended to help soften the blow of rising prices. Nevertheless the energy crisis poses a threat to further weaken the German retail economy.
“Large shops with refrigerated counters use the highest amounts of energy and, as a result, food retail shops are suffering the most,” von Preen told Berliner Morgenpost. Some supermarkets in Germany have already decided to close early in order to save energy, though the policy has not been applied in many places.
According to von Preen, energy costs claim around 1,5 to 2 percent of retail turnover made in a shop. Since sales returns lie at around 3 percent, a further significant price rise for utilities could mean that turnover shrinks to 0 percent. With the energy crisis in its infancy, it remains to be seen if and how it will accelerate the work of coronavirus restrictions and further liquidate Germany’s retail sector.